A new survey highlights the importance of being prepared to deal with a cyberattack and data breach.
With cyberattacks in healthcare on the rise, it’s vital that practices have security measures in place to protect patient data.
Yet, only 63% of organizations have a cybersecurity plan in place, according to a survey by Software Advice, which means many are vulnerable to potentially crippling attacks that can be costly and damaging to patient trust.
The survey fielded answers from 296 respondents with IT management, data security, data management, security training or audit responsibilities at healthcare organizations around the country.
The data revealed that half of organizations have experienced a data breach, with 32% dealing with one in the past three years.
More than one in four practices (42%) has experienced a ransomware attack, with nearly half (48%) reporting the attack impacted customer data, while 27% said it impacted patient care.
After a ransomware attack has taken place, a third of respondents (34%) failed to recover patient data from their attackers.
With 55% of practices allowing access to more data than employees need to their job, it introduces greater human error into the mix.
To counter the increase in threats, CEOs at both provider and payer organizations must take a proactive approach to cybersecurity.
That includes putting preventative measures in place, such as more training for employees handling data to help them identify scams and attacks, as well as limiting certain data to the employees that need it.
Preventative measures, however, aren’t effective for attacks that have already happened, which is why it’s crucial for CEOs to implement a response plan “that includes defined roles and responsibilities, communication protocols, and a prioritization list,” the report said.
Not every organization that is prepared to prevent and respond to a cyberattack will be safe though.
Banner Health’s next CEO, Amy Perry, recently told HealthLeaders that it’s difficult to protect yourself again bad actors that are coming at you from all different angles.
"Do I see a solution? Not an easy solution,” Perry said. “All of the health systems, including Banner, have multiple, multiple investments in protection. But again, moving at the speed that the people that are working on the other side of this in the dark corners of the world, I think we've got a long way to go before we figure out how we keep ourselves safer every day.”
Hospital leaders are weighing how to get the most out of their people and operations across their organizations.
As healthcare reckons with change, hospital and health system CEOs recognize that the status quo is no longer cutting it.
To combat the challenges at the forefront, as well as the ones brewing under the surface, leaders must have a proactive mindset for the sake of the people in their organization and the business.
Here’s a look at four areas executives at the recent HealthLeaders CEO Exchange in Kohler, Wisconsin, identified as in need of a fresh approach:
Leadership accountability
CEOs may oversee everything, but they can’t be everywhere all at once. That’s why it’s critical to develop accountability within the C-suite and management teams to ensure goals are being met.
How can you foster accountability? For one, CEOs at the Exchange shared that it’s important that an expectation is set, while aligning leaders with system goals and showing them where they fit. It’s likely that leaders will have blind spots, but it’s on CEOs to point those out and address them.
Most importantly though, accountability can’t be achieved without metrics to track performance. CEOs should give their leaders the proper resources, analytics, and data so they can see how their decisions play out.
Physician autonomy
Attracting and keeping physicians is one of the biggest pain points CEOs are grappling with right now.
There are several ways to improve physician relations, but one strategy CEOs shouldn’t overlook is giving their doctors more of a say in how they practice.
Physicians care about their life mission and as such, they want to be involved in the clinical decisions made at the highest level. They also want to be part of administrative decisions, but they especially want to drive clinical care. It’s on CEOs to give them the forum to do just that.
Whether it’s through surveys or open dialogue, CEOs can seek out from their physicians the areas that would move the needle most, potentially leading to higher satisfaction and greater attachment to the organization.
Pictured: Attendees take part in discussions at the CEO Exchange.
Implementing AI
Some technology investments in healthcare still feel like a risk at this point, but it’s hard to deny the immediate benefits of implementing generative AI.
Another way of keeping physicians happy is by cutting down on the administrative work that often leads to burnout and that’s one instance where AI can work its magic. For example, physicians can get more time back with AI reducing the constant need for inbox management, allowing doctors to do more fulfilling work with their patients or focus on their own well-being.
Margins are tight for many, but many hospitals will be stuck in an endless cycle unless they set aside resources to invest in innovative solutions that will soon be essential and not just a luxury.
Building a pipeline
While CEOs have their hands full maintaining their workforce, they must look beyond the current generation of workers if they want to build something sustainable.
That means working with educational institutions, all the way down to the high school level even, to develop skills that will be crucial to the future of healthcare. Dual curriculums or national certifications, for example, will create more workforce opportunities and streamline clinical talent to organizations that need them.
There also needs to be a greater emphasis on developing a tech skillset for the next wave of workers. As more technology enters the industry, both clinical and non-clinical staff with experience handling systems will be valuable for hospitals.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
The company reportedly wants a partnership to back the opening of new clinics.
CVS Health appears committed to growing its Oak Street Health business, but reportedly wants help with its expansion efforts.
The retail giant is on the lookout for a private equity partner to bring in funding for the primary care provider it purchased a year ago for $10.6 billion, according to Bloomberg News.
A potential joint venture would lessen the financial burden on CVS as it aims to open new clinics without being encumbered by heavy losses.
The report stated that the company is working with financial advisers and has reached out to multiple private equity firms about a partnership. However, the discussions are in the preliminary stage so it’s possible a deal may not happen.
Bloomberg cited that CVS is eyeing a similar joint venture to the one Humana forged with Welsh, Carson, Anderson & Stowe (WCAS) in 2020 and 2022 for CenterWell Senior Primary Care, which allowed Humana to buy back its interest over time while netting WCAS a return.
CVS said in February that it wants to have more than 300 Oak Street clinics by 2026, including the opening of 50 to 60 clinics this year.
While the company pushes forward with expansion, other retailers such as Walmart and Walgreens have retreated from their primary care business due to difficulties in scaling.
The primary care business is a slow burn because it is cost-intensive, but allows organizations to guide patients to more lucrative care and services.
By bringing in a private equity firm to share the investment required to prop up Oak Street, CVS would have more leeway to see through its long-term vision for the clinics.
The health system posted encouraging first quarter earnings that show it’s climbing out of financial turmoil.
Providence’s finances are finally heading in the right direction after languishing in the red for multiple years.
The nonprofit health system released its first quarter earnings, which showed a promising turnaround thanks to higher admission volumes, improved reimbursement rates, and reduced length of stay.
Through the first three months, Providence generated $176 million operating income and $360.3 million net income, compared to a $345 million operating loss and $117.3 million net loss over the same period last year.
Providence faced significant financial struggles the past two years when it, along with many nonprofit hospital operators, grappled with increased labor costs and lower patient volumes in the aftermath of the COVID-19 pandemic. The results were a $6.1 billion net loss in 2022, followed by an improved, but still consequential net loss of $596 million in 2023.
“Together, we are navigating the headwinds facing health care by focusing on our strategies for recovery and renewal,” Providence CFO Greg Hoffman said in a news release. “We expect the positive momentum to continue throughout the year and are excited for a strong 2024.”
Operating revenue in the first quarter jumped 14% to $7.8 billion as inpatient admissions increased 3%, acute adjusted admissions rose 4%, and case mix adjustment admissions grew by 4%. Meanwhile, length of stay dropped 4% due to improved access to post-acute care.
On the outpatient side, physician visits, home health visits, and outpatient emergency room visits all increased by 2% each. However, total outpatient visits went down by 2% due to the sale of Providence Oregon’s outreach laboratory services business in August 2023.
Increased patient volumes also led to a 6% rise in operating expenses to $7.1 billion. In terms of labor costs, salaries and benefits expenses rose 4%, but Providence managed to reduce agency contract labor by 42%.
The health system also called attention to divestures of revenue cycle company Advata, modular service business Acclara, and lab services in California for its improved cash position.
“These transactions represent our strategies to diversify and deconstruct the traditional model of health care through partnerships, allowing Providence to expand access to care, become more nimble and collaborate with others to better serve our patients, caregivers and communities in a more affordable way,” Hoffman said.
Providence’s first quarter earnings come on the heels of longtime CEO Rod Hochman announcing his retirement. Hochman will vacate his position at the end of this year and move into a CEO emeritus role. The health system is in the process of selecting his successor.
Amy Perry sits down with HealthLeaders ahead of taking the reins of the health system.
Banner Health will welcome a leadership change this summer when current president Amy Perry takes charge.
Perry will replace longtime CEO Peter Fine, who is set to retire after 24 years, and bring with her a refreshed approach that aims to both build on Fine’s legacy and push the health system to new heights.
Perry joined the HealthLeaders Podcast this week to offer insight on tackling the biggest pain points facing hospital CEOs right now and delivering on Banner’s mission statement of “making healthcare easier, so life can be better.”
“When we look at our mission statement, it’s not only about the patients we serve or the members we insure, it’s about the people who deliver that care—our physicians, our nurses, our workforce,” Perry said. “We need to make it easier for everyone to be able to access care, deliver care, make it more affordable. That’s how we define being that trusted health partner.”
Check out the podcast to hear how Perry is strategizing for that mission, which includes investments in technology to “facilitate a different kind of work stream.”
The discrepancy is making it more difficult for organizations to retain their workers.
For CEOs navigating workforce challenges, it’s vital to understand what matters most to your employees.
Yet, employers appear to have misperceptions about workers’ concerns regarding burnout, job satisfaction, and fulfilment, according to a survey by Indeed.
The report, which fielded responses from 1,014 healthcare job seekers and 489 professionals engaged in recruiting or hiring employees from November 2023 to January 2024, revealed that employers still have their work cut out for creating a culture workers want to be part of.
Burnout remains an obstacle, but only 9% of respondents said they were dissatisfied with the profession overall. However, 54% of employers said that the average tenure of their employees is four years or less, suggesting that burnout and workers walking out the door is not due to the industry, but the result of dissatisfaction with their organization.
The survey found that the top five drivers of burnout for workers were feeling overworked and responsible for too many things during shifts (64%), feeling underappreciated by a manger or supervisor (42%), not enough resources to do their jobs adequately (30%), feeling underappreciated by their patients (29%), and feeling underappreciated by their coworkers/colleagues (28%).
Significant drivers of job dissatisfaction included shift incentives (36%), sign-on bonuses (34%), lack of appropriate staffing in critical positions (32%), and the psychological safety measures in place to address burnout (31%).
Employees care about compensation and benefits, but they also value relationships. The top two factors job seekers were most satisfied with were relationships/interactions with their patients (72%) and co-workers (67%), while more than half (56%) of respondents said they are most satisfied with their relationship with their manager or supervisor.
Not enough employers recognize what’s important to workers though. For example, only 20% of employers felt appropriate staffing in the workplace was important to employees, compared to 50% for workers.
Work-life balance was chosen as the second-most important factor for job seekers (78%), but less than half (48%) of employers considered it as a top three reason for potential employees to join an organization.
“For healthcare organizations, the real journey begins with recognizing and addressing the functional gaps within their workforce structures,” Travis Moore, director of the healthcare category at Indeed, said in the news release. “It starts by understanding the unique contributions each of these remarkable individuals bring to their organizations, but the real magic happens when we design models that seamlessly blend into their lives, offering not just a means to live but a pathway to autonomy through diverse and flexible working options.
“By nurturing a culture of support and understanding, employers can not only boost job satisfaction but also uplift the quality of care provided by their teams.”
CEOs have little choice but to rethink the way they approach the workforce if they want to build a sustainable environment for their employees.
To understand what their workers want, leaders should try to put themselves in the shoes of their physicians and nurses and aim to improve the experience by focusing on work-life balance and relationships.
Investing in and implementing technology can also help reduce the workload placed on employees, potentially resulting in less burnout and turnover.
The deal is expected to close this summer, pending regulatory approval.
Jefferson Health and Lehigh Valley Health Network (LVHN) are on the brink of forming one of the largest nonprofit systems in the country.
The two sides signed a definitive agreement to merge, five months after signing a non-binding letter of intent to combine, which would create a 30-hospital system with more than 700 sites of care and more than 65,000 employees in Pennsylvania and New Jersey.
Along with providing financial stability for both operators, the $14 billion merger would allow Jefferson Health to expand its health plans into the Lehigh Valley area, strengthening its insurance business.
Financial terms of the deal were not disclosed. The health systems expect the transaction to close this summer, pending final reviews and regulatory approval.
Following the merger, Jefferson CEO Joe Cacchione will continue at the helm, while Lehigh Valley’s CEO Brian Nester will report directly to Cacchione as the executive vice president and chief operating officer of the new system, as well as president of the legacy LHVN.
“Through our integrated operating model, the combined organization will provide the communities we serve access to the highest quality care, the benefits of continuous research and innovation, a network of specialists, clinical trials and so much more, while also building an organization that prioritizes health through value-based care,” Cacchione said in the news release. “This combination represents access, choice, innovation, opportunity, increased equity and stability – for patients, physicians, faculty, staff, students and health plan members and our communities at large.”
Jefferson Health has grown significantly in the past decade, expanding from three hospitals in 2015 to currently 18, thanks to a series of acquisitions.
In January 2023, the system announced reorganization efforts to restructure from five regional divisions into three with the aim of increasing efficiency. In July, Cacchione said the operator would reduce its workforce by about 400 positions, or approximately 1%.
Meanwhile, Lehigh Valley said it would cut approximately 240 positions last October as part of restructuring.
It’s unclear if any layoffs will take place following the merger.
Jefferson Health reported $30.5 million in operating loss for the nine months that ended March 31, compared to a $117.5 million loss over the same period in 2023.
Lehigh Valley reported an $11.1 million operating loss in the span this year and a $52.2 million loss for last year.
Top hospital leaders have little choice but to strategize for a changing landscape.
When it comes to hospital CEOs’ top concerns, workforce remains king.
The challenges with keeping the backbone of organizations strong continue to pile up, forcing leaders to reconsider how to appeal to the wants and needs of their nurses and physicians.
Reimagining workforce solutions was the topic of conversation on the first day of the HealthLeaders CEO Exchange, where dozens of hospital decision-makers gathered in Kohler, Wisconsin, to hear and learn from their peers.
Improving the experience
Recruiting and retaining talent is far from easy in an uber-competitive environment, but it’s not reductive to say that it comes down to understanding what workers are seeking from their experience.
That preferred experience is also changing over time as newer generations put greater value on work-life balance, often putting it ahead of compensation. Whether it’s physicians or nurses, CEOs must consider how to give more time back to their staff so they can use it outside of the workplace, potentially reducing burnout and turnover.
Leaders should also be aware of how they’re training and developing their managers to oversee the workforce. Placing an emphasis on relationships enables more connection for staff amongst themselves and with management, cultivating a culture that workers want to be part of.
A happier, more fulfilled physician or nurse is less likely to walk out the door, which ultimately saves on the bottom line.
Pictured: Top hospital leaders are currently meeting at the CEO Exchange to talk workforce and more.
Leaning on tech
Reducing the workload on staff is easier said than done, but this is where investments in technology can pay off in a big way.
Generative AI has proven to cut down on the time physicians put towards completing administrative tasks, such as documentation or responding to patient emails.
Many of the CEOs in attendance also reported either already implementing virtual nursing or having plans to roll it out, illustrating that leaders have had to pursue innovative solutions in a post-COVID world.
As hospitals continue to learn the best ways to utilize technology on the patient side, there’s plenty of low-hanging fruit in terms of its benefits within the workforce. Considering the impacts on recruitment and retention efforts, those benefits are no longer luxuries but rather must-haves.
Stay tuned for more coverage of the Exchange as the CEOs continue to drill down on solutions and strategies in the remainder of the event.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
Amy Perry shares with HealthLeaders her plan to guide the health system into the future.
As Banner Health enters a new era under new leadership, incoming CEO Amy Perry is shifting the focus onto technology to drive the health system forward.
The Phoenix-based nonprofit operator is saying goodbye to longtime CEO Peter Fine, who is retiring after 24 years at the helm, and welcoming current president Perry into the role beginning June 30.
The changing of the guard represents Banner charting its course for the foreseeable future, with an emphasis on modern, innovative solutions that have become almost a necessity for health systems in a post-COVID world.
“When Peter came to Banner, he established a 20-year strategic plan and that got us all the way up to the precipice of COVID and then we've been calling the last three-ish years ‘survive it’ because it's been such a difficult time,” Perry told HealthLeaders. “But now coming out of that and seeing the momentum that Banner has is really the start of our new 10-year plan, 10-year vision for the future.”
At the heart of that vision is investment in technology to make care easier to access for patients and easier to deliver for physician and nurses. Perry highlighted that last fall, Banner put together a “very aggressive” five-year plan to make a billion-dollar commitment to technology to build its automation and data for accelerating usage of AI and large language models. Further investment will also go towards the digital consumer experience.
“That technology, changing our reimbursement, even leaning further into our payvider status, being able to ensure more members, and just serve our community in a new and innovative way is really where we're going in the future,” Perry said.
Specifically, Banner is prioritizing data. The soon-to-be CEO noted that before you can use data in different ways, it must be curated in a manner that can be utilized in the most streamlined and accurate fashion. Without clean, highly reliable data, you’re susceptible to human error in its collection and management.
“That is the fundamental, important stuff of putting together any technology plan,” Perry said. “It allows us to create more customization in our digital consumer experience. It allows us to do more predictive analytics.”
Ultimately though, Banner wants to use technology to make delivering care easier, which is why it is rolling out an AI tool to all 33 of its hospitals that is designed to take some of the burden off clinicians.
The technology, developed by Regard, will summarize clinical notes, allowing doctors to spend more time with their patients and less time completing administrative tasks.
Banner recognizes the importance of using technology to supplement the workforce and drive labor costs down. In 2023, the system experienced an 8% increase in expenses, including salaries, benefits, and contract labor rising 6% year-over-year to $6 billion.
“It's critical that we change our processes and we add the technology that can facilitate a different kind of work stream,” Perry said. “We talk a lot at Banner about the fact that we just can't ask people to do more with the same number of people without changing the process. It's absolutely impossible. It's not sustainable. So the only sustainable change is to look at each one of our work streams and say how do we blow this up? How do we start over? How do we do it differently?”
These are questions health systems across the country are asking themselves, but the ones attempting to answer them won’t be caught flat-footed during healthcare’s digital transformation.
A strong start is expected to give way to more modest returns the rest of the year.
Kaiser Permanente started the year on a positive note by riding “favorable financial market conditions” to a healthy bottom line in the first quarter.
However, the nonprofit health system cautioned that historically, the first quarter is buoyed by the open enrollment cycle while the operating margin in the remaining quarters is usually deflated by steady revenue and incurred expenses.
For the first three months of the year, Kaiser reported a $7.4 billion net gain, $935 million of operating income, and a 3.4% operating margin. All those figures easily surpassed Kaiser’s performance over the same period in 2023, when it reported $1.2 billion in net income, $233 million in operating income, and a 0.9% operating margin.
Here are three takeaways from Kaiser’s first quarter financial activity:
Lifted by Geisinger deal
Kaiser’s $7.4 billion in net income was largely the result of its subsidiary, Risant Health, completing its deal for Geisinger Health.
The acquisition is part of Risant’s vision to form a value-based network, with four to five other systems expected to be added in the next five years.
By bringing in Geisinger, Kaiser received a one-time net asset gain of $4.6 billion. Excluding the deal, Kaiser’s net income for the first quarter was $2.7 billion.
The transaction considerably strengthened the system’s bottom line in the quarter, but will require investment going forward, with Kaiser having designated up to $5 billion to support Risant.
Rising expenses
Though Kaiser’s operating income of $935 million marked an increase of more than 300% over the first quarter in 2023, the system noted that it was still “below historical first-quarter trends leading up to the pandemic.”
The reason? Cost pressures stemming from high utilization, care acuity, and higher prices for goods and services. That led to Kaiser reporting operating expenses of $26.5 billion, representing a nearly 6% increase from the same period last year.
With labor costs weighing heavily on hospital operators, many are turning to trimming the workforce. Kaiser has now laid off around 350 workers in mostly IT and administrative roles since last fall, with 76 more reductions coming by June 21, according to regulatory documents.
Shifting out of private equity
Amidst all the chatter about private equity’s impact on healthcare, Kaiser is planning to sell up to $3.5 billion of its private investment holdings, according to The Wall Street Journal.
The report, which cites unnamed sources familiar with the situation, stated that the move is due to cash constraints as the system works with investment bank Jefferies Financial Group to liquidate assets. Kaiser is also expected to sell off similar sized holdings later this year.
The system and its subsidiaries held almost $100 billion of investments at the end of 2022, most of which were made through its pension system, the report said. Illiquid alternative assets, including private equity and real estate assets, made up nearly 57% of Kaiser’s investments at the time.
The sales point to Kaiser moving away from private equity and into other investment areas.
Pictured: Top hospital leaders are currently meeting at the CEO Exchange to talk workforce and more.
