CEO John Couris shares three ways the system has stayed above the financial fray.
CEOs are now embracing the new normal. As 2023 starts to wind down, many health systems found themselves in a year of transition, away from the crisis mode of the pandemic and looking forward to new opportunities and new strategies that work in the current healthcare environment.
Challenges will always remain for CEOs, but one CEO in particular says his organization has come out of the pandemic practically unscathed.
John Couris, president and CEO of Tampa General Hospital (TGH)—a nationally recognized, nonprofit, academic and research health system partnered with the University of South Florida—recently spoke with HealthLeaders about the system's successes throughout the pandemic and the work that he and his team are continuing to deploy as they set their sights on the next decade.
While health systems have been digging their way out for years following the immense COVID shake-up, Couris says that his system bucked the financial trend of sitting in the red.
What does he mean by that? There are three key areas that put TGH ahead of the curve mid- and post-pandemic:
1. Patient volumes
A dip in outpatient volume pushed a lot of organizations into the red. Routine exams and surgeries finally came back, but patients weren't eager to rush to the same institutions that managed COVID patients.
While patient volumes have since increased for both inpatient and outpatient services, TGH’s patient volumes were never affected in the first place.
"Our volumes are way over pre-pandemic levels," Couris says. "Thankfully, we never lost any money or operated in the red through the pandemic or after the pandemic, and I'm taking out any kind of COVID money," he adds.
2. Reliance on agency staffing
Agency staffing became a trend for organizations looking to curb their staffing shortages while some nurses took advantage of making more money doing their job by traveling to different systems. This was great for nurses looking to pay off their student loans or to cover the increase in cost of living—but for hospitals and health systems, it meant shelling out more cash to be properly staffed.
While TGH did rely on agency staffing, they were able to curb those numbers to help with their financials.
"Our reliance on agency is down almost by 70%," Couris says. This gives the system the opportunity to invest in its own workforce and invest in more patient options.
3. Supply chain wins
Just as clinical care workers were in short supply and high demand during the pandemic, so were everyday items used to take care of patients.
But the healthcare industry wasn't the only one affected by supply chain woes—almost every industry was affected, and continues to be affected, by falling short to the high demand of everything from drug shortages to construction materials to car manufacturing components.
And while TGH did run into supply chain issues when it came to construction projects, it only pushed projects back by about three months, and the system was able to open a freestanding emergency department.
"We've been able to manage through the supply chain issues relatively well," Couris says. "We're not perfect by any stretch of the imagination, but the team has done a nice job with managing supply chain Issues that have been affected by COVID."
Maintaining success
The key to these successes is continuing to maintain them while creating more. How will the organization do that? By following its robust strategic plan, Couris says, which they are currently in the middle of refreshing.
The organization refreshes its strategic plan centered around discipline and focus every five years, which has kept the organization on track, focused on the present and near future, and not being distracted by the distant future of an everchanging industry.
"That kind of discipline and focus and rigor that we bring to working the issues has helped us," Couris says. "There is a tendency sometimes in our industry to get distracted by the next shiny object that comes into your view. We've worked hard at not allowing ourselves to get distracted unnecessarily; that has helped us to dig to go a little deeper."
Additionally, the organization conducts an annual initiative called Stop, Start, Continue.
"We go through an exercise that looks at all of our strategies, all of our tactics, the things we've accomplished, things we've struggled with and haven't accomplished," Couris says. "We take all of that work and we run it up against our vision of being the safest and most innovative academic health system in America. We ask the leadership team: Is this something we need to stop? Is there something new that we need to start? Is there something that's going well that we need to double down on and continue?"
This team effort has enabled the health system to grow and become stronger during Couris' 6-year tenure.
"When I got here [six] years ago, we were a $1.3 billion health system in net revenue. We're now a $2.5 billion health system," he says.
The system had 17 locations when he first joined, which has now grown to over 130 locations, including a new behavioral health hospital the system broke ground on this week, and is slated to open in late 2024.
"Six years ago, our quality was stagnant, [now] our quality continues to improve," Couris adds. "We were nationally ranked in every major U.S. News and World Report indicator last year for the first time in the history of the institution. We were either in the top 50 or the top 10% in every service they measure quantitatively."
Christine Madigan, the chief consumer officer at Tufts Medicine, shares insights into the Boston-based system rebrand and its successful outcomes tracked so far.
Within the competitive Boston market are many well-known and nationally-ranked health systems. There is Mass General Brigham, Mass General, Beth Israel Lahey Health, and Tufts Medicine—to name a few—all competing for potential patients and workforce recruits.
How does a health system stand out in such a saturated market? Christine Madigan, SVP and chief consumer officer at Tufts Medicine recently shared the strategies behind the system's successful rebrand and how it's helping the health system stand out in the competitive Boston market.
Before the brand changed to Tufts Medicine in March 2022, bringing together the system's hospitals, home healthcare business, and integrated physician network under the unified name, it was known as Wellforce. Wellforce was essentially a holding company for the different entity partners of the organization, Madigan says.
"When COVID came along, all the parties within Wellforce started working together. They started sharing PPE [and] other scarce resources, they started consolidating buying power. That opened up a lot of eyes," she says.
When a rebrand was introduced, it was not only welcome, it validated the system's ongoing collaboration, Madigan says. It signaled further integration, which extended to system-wide platform use and standardization, including executing Epic across the system in one day.
"For us, it is all about a digital revolution to take the friction out of our healthcare experience. The fundamental truth about a digital revolution is you have to have one standard process to be able to digitize," she says.
"Change is tough, and a rebrand is tough, and that can be something that is hard to sell in," she says. "But I think so many people saw the opportunity of aligning together, aligning our strengths, and aligning our culture, and having everybody work as a part of one system."
1. Abide By Brand Guidelines: Consistent Communication is Key
Madigan joined Tufts Medicine in January 2022 from New Balance where she most recently served as VP of New Balance Athletics Global Licensing. Other roles she has held include serving as director of global marketing and brand management for Polaroid and brand management of Diet Coke for Coca-Cola.
"When I came on, I put a lot of the basic guardrails in place around the brand," she says. This was step one.
"When you do a rebranding as we did, you always put brand guidelines in place. You need to have the most consistent communication and experience. We put together a brand house [guide] that talks all about our personality and our assets and our differentiation. If we're in a consumer's mind why would we go to one place over another?"
Consistency is key in marketing, especially in healthcare where there are so many smart and strong voices coming together from across the system.
"Having all of those voices makes it hard to be consistent. For a rebrand to be powerful, for you to be able to elevate brand awareness, be highly efficient, and reaching consumers and patients and bringing them in, needs to be consistent and needs to be one name brand," she says.
"The real power is behind consistency and simplification in branding," she adds.
2. Research, Test, and Ask for Feedback From Internal and External Stakeholders
A lot of research went into coming up with a new name for the system, Madigan says. Many names were tested with different groups, including internal stakeholders, private and employed physicians, and consumers.
When testing new names, the system asked about likeability as well as if the physicians thought a specific name would help them grow their business better. "Across the board, people thought they would come to a system that was named Tufts more," she says.
"We went with Tufts Medicine and that signaled academic strength," she says. "It signaled science. There are many world-class institutions that have "medicine" as part of the name and the Tufts name has such a great reputation from the University and its Medical School."
Since launching the new brand in 2022, the system conducted brand tracking which resulted in the Tufts name successfully conveying academic leadership, science, and high reputation, she says.
"When we did our brand tracking at the end of last year, [having] only launched our brand March first, in that time we were #2 in the market in every single one of the brand funnel measures: awareness at the top, consideration, preference, and loyalty," she says. "When you think of the Boston market … to be #2, that's such a testament to so many people and what our physicians and care teams do day in and day out. I do think the name is a little bit of a part of that too. That recognition helped elevate [us] in top-of-mind consideration for consumers and patients."
3. Engage Your Consumers to Create Brand Loyalty
Madigan's background in other sectors helps her bring a new and different perspective to how the system can look at patients as consumers.
"It's still a controversial decision that we talk about consumers and not just patients," she says. "I get that and my CEO gets that too, but we're trying to make the point that consumers do have a choice. They have more choices now and they're voting with their pocketbooks, they're voting on experiences, they're looking at reviews more than they ever did before. It's a different game and thinking about it as consumerism is different than just solving the near-term needs of the patient that happens to be in front of you."
"We talk a lot about anticipating consumers' needs," she adds, saying that Amazon is a great example of that. "How do we do that in the healthcare industry and in my system where we're trying to get better at anticipating needs and then making it frictionless to fulfill them?"
The system has a lot of internal collaboration and a warm consumer experience, Madigan says. "It is the type of place where our teams work well together, from physicians, nurses, care team members, across the board. As a patient and a consumer, you feel that, and it is that warmth that you're looking for that you don't often get in what can be a really tough, really cold experience."
"My background is in consumer marketing and direct to consumer (DTC)," Madigan says. "In DTC, you want to find the highest lifetime value consumer to bring in and keep loyal. You want to try to measure that as to how many times are they going to come back and what their cart size is going to be."
While it's a little different than in healthcare, she says, it's still interesting to think about the patient and consumer journey. "Where does the consumer come into your funnel or in your pathway? Is it through primary care, maybe even OBGYN? With the changes in the last two or three years, it could be urgent care. It could be a Tik Tock video for a younger consumer. There are so many different pathways in, and understanding where they are and then understanding the lifetime value of those consumers of those patients, that's one thing that I'm trying to bring in here."
"What would benefit healthcare is to have those consumer profiles and the consumer personas that best match their brands and best match where they want to go strategically, and that's what we're trying to do at Tufts Medicine," she says.
And while the system will never turn a patient away, it's still helpful to know who to target and who would choose Tufts Medicine over other competitors, she says.
"It's my job to figure out how to target those consumers to do that. I think that's a way that the whole industry can elevate itself is starting with that."
Year over year, hospital CEO exits remain high through the first half of 2023.
June was a slow month for hospital CEO turnover, according to a new report from Challenger, Gray, & Christmas, Inc.
Only two hospital CEO exits were tracked in June by the firm, a jump from the 18 tracked just the month before. It's also significantly less than the 15 exits tracked in June 2022.
But while hospital CEO turnover has taken a nosedive, hospitals have experienced a 49% increase in CEO turnover during the first six months of 2023, compared to the exits during the first six months of 2022.
In 2023, hospitals announced 82 CEO changes during the first six months of the year, while only 55 hospital CEO exits were recorded during the same time in 2022.
"Hospital systems are struggling in a number of areas post-pandemic. Talent shortages, retention, and wages for staff are an issue, while cost of care is rising," Andrew Challenger, SVP of Challenger, Gray & Christmas, Inc. said in a previous statement. "Many systems are struggling to operate, and new leadership is needed to attempt to turn things around."
June was also a slow month for CEO turnover in other sectors, with 118 CEOs leaving their posts, the second lowest total this year following 112 CEO exits tracked in January.
This is a stark contrast from the exits tracked in May. In fact, it's 47% less than the 224 exits tracked just the month before, which was the highest total of exits for a single month on record since the firm started tracking CEO turnover in 2002.
But while the numbers have fallen month over month, year over year, June 2023 tracked 11% more exits than June 2022, where 106 CEO exits were recorded.
So far this year, the firm has tracked 907 CEOs leaving their posts, which is the highest January to June total the firm has tracked since it began tracking CEO exits in 2002.
"The economy is showing great resilience at the moment. We've seen a considerable number of changes this year, as leadership grapples with uncertainty in the coming months," Challenger said in a statement. "Historically, on average, June is the slowest month for CEO turnover and layoff announcements. Mid-year is the fiscal year-end for many companies, and in many cases, major moves do not occur in this month."
Despite job eliminations due to financial woes, the healthcare sector saw the most added monthly jobs so far this year in July compared to the prior six months.
Recently, the healthcare sector has seen the elimination of non-clinical jobs due to financial strains while also facing dangerous levels of vacant clinical care roles. Due to stressful patient/nurse ratios and what they've deemed as unfair wages, nurses have also called on strikes across the country.
But, despite these hardships, the sector experienced significant job growth last month, bringing a new monthly high to the year.
According to the U.S. Bureau of Labor Statistics, the healthcare sector added 63,000 jobs in July, an increase from the monthly average gain of 51,000 jobs in the past 12 months. This is also the highest job growth the sector has seen so far in 2023, with January being the second largest with 58,000 jobs added during the month.
Significant job growth was experienced in the ambulatory healthcare services sector, which added 35,000 jobs. Additionally, hospitals added 16,000 jobs and nursing and residential care facilities added 12,000 jobs during the month.
A breakdown of the monthly added jobs in the healthcare sector teases promising job additions in the coming months. Is the July increase just a fluke, or will we continue to see those numbers rise? We'll have to wait and see where job growth is experienced during the third and fourth quarters of the year.
Across all sectors, total nonfarm payroll employment added 187,000 jobs in July, according to the BLS. This is less than the average monthly gain of 312,000 jobs added during the past 12 months.
In addition to the healthcare sector, significant job gains occurred in the social assistance, financial activities, and wholesale trade sectors.
The unemployment rate changed little during the month, going from 3.6% in June to 3.5% in July. Since March 2022, the unemployment rate has increased from 3.4% to 3.7% since March 2022, according to the BLS.
Chief nurse executive Kasey Paulus details how to bring the future of nursing to the present.
Editor's note: This conversation is a transcript from an episode of the HealthLeaders Podcast. Audio of the full interview can be found here and below.
Now is the time to innovate and move past outdated ways in which the nursing sector operates to better position the sector against workforce issues and care restraints.
It's time to disrupt the status quo of nursing, says Kasey Paulus, MBA, RN, CENP, senior vice president and chief nursing executive for WellSpan Health.
During an interview featured on the HealthLeaders Women in Leadership podcast, Paulus details ways that the York, Pennsylvania-based health system has innovated to bring the future of nursing to the present. She also shares how her background as a staff nurse informs the way she leads as a nursing executive.
This transcript has been edited for clarity and brevity.
HealthLeaders:In your current leadership role at WellSpan, how does your background as a registered nurse and staff nurse affect the way you lead today?
Kasey Paulus: As a staff nurse, I was very in tune with the inefficiencies I often experienced in my own practice and the profound impact that leaders had on my work environment. That really shapes how I lead and my decisions as a leader are focused on doing what's best for our patients [and] creating an environment where our nurses can do their best possible work.
We know nurses want to feel valued by the organization, they want to feel heard, they want a voice in their practice. My job as a leader is to make that happen, and that is what drives our approach to nursing leadership here at WellSpan.
HL: Based on past and current trends, where do you see the future of the nursing industry heading and what needs to change to enable a better future of clinical care?
Paulus: We are just beginning to see so many significant shifts that are going to be happening within healthcare and within nursing. It can be challenging to think of how we're going to lead and navigate all those changes, but I think it's exciting. It has to start with a commitment to innovation and challenging ourselves to move past "because we've always done it that way." We have to challenge the status quo.
We know we are headed for one of the most significant nursing shortages we've ever seen, and that is going to require us to figure out how to deliver care in new ways because we just simply won't have enough nurses to continue in our current models, especially as we look to having more and more patients requiring more care as the age. The math equation isn't going to work out, so we have to think differently.
We have to prepare for those new models of care. Historically in nursing, we often think of nursing spending most of their time in the acute care setting, and so we're going to likely see some pretty significant shifts in where we provide care. And so thinking about how we prepare the future workforce to provide nursing care in different care settings and it will be across the continuum from the acute care setting to at home and everything in between.
We're also going to have exciting opportunities to incorporate technology to help us provide and deliver patient care and taking some of that administrative and documentation burden off of our nurses. Frankly, nurses have been wanting to solve for this their entire careers. They want to spend time with their patients, they want to provide excellent care.
As an industry, we have to think differently about our current and future workforce and what they're looking for when it comes to flexibility. Historically, we have not always responded as we could from a place of flexibility. The last couple of years have forced us to all think differently and challenge the status quo around how else we can engage the workforce and allow them to continue to practice but have some of that work/life balance. Some exciting shifts [are] happening with ways to still engage as a nurse, flexible work options, scheduling options, making sure we're focused on well-being, and our benefits and total rewards.
Through all of this, we want to make sure we continue to make nursing an attractive profession that people want to come and practice as a nurse, and make sure that future nurses continue to look at nursing as a profession. That's just going to mean thinking differently, engaging with our academic partners, and going further upstream to recruit folks into the profession.
HL:Workforce shortages have been an ongoing trend, especially with nurses. In what ways is WellSpan working on building up that nursing pipeline and creating the future nurse workforce?
Paulus: It's about recruitment and retention and thinking through those two elements differently. They're two different words with two different strategies. On the recruitment end, going upstream partnering with our academic partners, thinking differently about how we can train the future generation. And a lot of that's going to come through some really strong collaborative partnerships. But also going further upstream connecting with high school students as well, and just really creating clarity for the pathways for getting into nursing. But then also looking at you know nontraditional students as well, and how do we make it easy for them to enter into the nursing profession. So we've got strategies and play around all of those avenues like many other health systems were we've been partnering. With international nurses as well, to help meet some of our needs and really. Looking ahead to the future.
On the retention side, how do we create an excellent, flexible work environment for our nurses where they want to continue to stay and practice, where they feel valued, where they feel that they have a say and a voice in their practice. We're piloting a lot of different staffing and scheduling options. Instead of your traditional three 12 hours shifts a week, trying to think differently and allow folks to continue to engage in the health system in non-traditional ways than they have in the past.
HL: How is WellSpan Health leveraging innovation to streamline nurses' work at the bedside?
Paulus: I'm so proud of the work we have underway here at WellSpan. In early August we are launching a pilot focused on virtual nursing and Tele-sitting using an AI capable platform called Artisight, and the model is based off of utilizing a camera and a microphone in a patient room, access to a smart capable TV or tablet, and then layering artificial intelligence functionality on top of the hardware. This will allow us to augment existing acute care delivery models with the virtual nursing staff who work alongside our bedside nurses and help support patient care, including completing admissions, discharges, patient education, documentation of care, and interventions to help prevent falls and improve patient safety. The model supports our nurses at the bedside, and going back to your other question, it also creates another option for working clinically that historically hasn't existed. It's another way of being able to keep our highly skilled and tenured nurses working clinically at the bedside.
Additionally, our colleagues in nutrition and food services are gearing up to pilot a robotic food trade delivery system. We know that nurses in the hospital spend about 3.8 hours of every 12-hour shift walking, and so partnering closely with our nutrition and food services and other disciplines, is one way we can automate some tasks, which frees up capacity for the entire care team and allows our nutrition and food services team to work differently and help support our nurses.
We were one of the first health systems to go deep in leveraging a software technology called DAX, which is a means of automating documentation through the use of ambient clinical intelligence technology. We've had physician colleagues using this in their practices for quite some time now and have had impressive results as a way of reducing that documentation burden. We are now getting ready to pilot that for nursing as well and we're going to be starting in our home care setting [to create] documentation efficiency for our nurses.
HL: What has your journey been like going from bedside nurse to chief nurse executive?
Paulus: My mom was a nurse, so she was certainly influential in my decision to pursue nursing. I started my practice, like many other nurses, in med-surge. Then I found my way into obstetrics and neonates, which I loved. From there I moved into quality and safety.
I was initially very hesitant to move into a leadership role. However, I had many colleagues who kept pouring into me and helping me grow my confidence and skills, and so eventually I said "yes" to leadership. My entire leadership journey evolved as a result of saying "yes" to opportunities that were outside of my comfort zone. It's been incredibly rewarding and that is certainly part of what has led me here to WellSpan.
I owe most of my career to mentorship and sponsorship. Our job as leaders is to grow and develop the next generation of leaders, and so that comes with mentoring and sponsoring others. As others continue to give me feedback, help me grow, give me stretch assignments, giving me exposure, that was what helped shape my career. In the process you grow your confidence, and it makes you a little bit more comfortable to take on that next assignment when it comes your way.
HL:What advice do you have for those who are looking to join the nursing workforce or to become nursing leaders?
Paulus: Nursing is such an incredibly rewarding career. It's challenging, there's no doubt about that, but it's so rewarding. For nurses who really want to grow as leaders, one of my favorite sayings is "bloom where you're planted." Within your current role, look for ways where you can grow and develop leadership skills. It might be serving in a formal or informal leadership position, maybe as a charge nurse, precepting others, working on committees or councils, and getting experience leading different small groups and small teams. There are many important skills within leadership, but high on that list for me is problem solving and the ability to partner with others.
We talked about the importance of mentorship—let someone know you want to grow as a leader and seek out a mentor. Most leaders are going to be more than happy to mentor someone, you just have to let someone know that that you're interested in doing that.
The reality is, and I've asked folks in a setting before, how many of you knew you wanted to go into leadership? And a few folks will raise their hands, but it's usually that folks didn't know they wanted to go into leadership and instead somebody went to them and said, "I see potential" and they start pouring into this person and giving them confidence. It's great if folks know they want to grow into leadership, but I think more importantly for the existing leaders, we have this responsibility to grow and develop the next generation. We need to be pouring into those folks where we see the potential and giving them confidence, giving them exposure, giving them the opportunities for them to grow.
Bassett's president and CEO Tommy Ibrahim shares how the system is taking steps to mitigate struggles currently plaguing rural health systems across the country.
According to the Centers for Disease Control and Prevention (CDC), 15% of all Americans live in rural areas—that's 46 million people. And, in general, the CDC says, "residents of rural areas in the United States tend to be older and sicker than their urban counterparts."
A general lack of resources and a limited talent pool to chose from are only a few pain points plaguing rural health systems, who care for those communities. One rural health system is trying to fix that.
Bassett Healthcare Network is headquartered in Cooperstown, New York, a village in central New York state with a population of less than 1,900. The system serves communities in eight counties across 5,600 square miles in central New York, and sees more than 700,000 outpatient visits per year.
Bassett Healthcare Network president and CEO, Tommy Ibrahim, MD, MHA, recently spoke to HealthLeaders about the hardships that rural health systems are currently facing and what steps the health system is taking to mitigate those.
"We were fractured from a staffing perspective even prior to the pandemic," Ibrahim says.
"Through the pandemic, and certainly post-pandemic, there have been permanent shifts in workforce that we continue to grapple with. We've seen this gig economy that's been created where there are a number of nontraditional entrants into the healthcare delivery system vying for the same pool of resources that we're vying for. There's been price wars that have been created, and wage inflationary pressures that have been created across our region, where we're going after the same very scarce pool of resources, and essentially dealing with a significant supply and demand imbalance that we're constantly grappling with. That's led to the necessary capital infusion into our workforce to be able to remain competitive."
"Because of the supply balance, we've had to rely very heavily on travel agency nurses and other staff, which has just completely cratered our financial performance," he says.
"The inflationary pressures coupled with the volume and revenue declines that we've been experiencing has been incredibly difficult. When you're operating on a razor thin to negative margins already, it [becomes more difficult] for us to continue to sustain key services and programs for the community," he says. "At the very heart of it is, you have a weakened rural healthcare system already, that's been further decimated, quite frankly, by some of these economic and environmental shifts that we're seeing in the industry and crippling at the heart of our ability to continue to provide key access to our patients."
These pain points, if not addressed, can have lasting effects on health systems and the vulnerable communities that they serve.
"I fear long term that has pretty significant adverse outcomes for our community and our patients. Couple that with the various social determinant challenges that we have to deal with: transportation, access to broadband, food insecurity, poverty, digital illiteracy—you name it— it's a very challenging population to begin with, and now we've made it even more difficult for us to truly meet the needs that are required."
Bassett is taking necessary steps to ensure the sustainability of the organization for its workforce and the communities it serves, Ibrahim says. And although there may be a lot of struggles currently, there is also great opportunity.
"Through the pandemic, one thing that's become abundantly clear is that we had a weakened infrastructure that's now become weaker, and it's catalyzed a lot of very positive internal movement to begin to address some of the critical areas that were neglected in the past," he says.
One way Bassett is addressing critical areas is looking at the heart of the system's operations.
Bassett is looking at operations such as "surgical OR efficiency, and making sure that we're capitalizing on the effectiveness and the efficiencies of those systems throughout the organization," Ibrahim says. They are also "looking at how we could reduce unnecessary waste in the system, and identifying cost initiatives around supply chain, pharmaceuticals, and clinical variation, and other clinical workflows that could create enhanced value both through revenue enhancement or through expense reduction."
Additionally, the system has launched the Acceleration office, which has transformative mandates within it to hold accountability and address operational challenges.
This includes "looking at how we can enhance revenue cycle, how we can improve denials, how we can better partner with our payers to improve reimbursement methodologies, and a whole host of other revenue, as well as cost containment initiatives that begin to create stability in the organization," he says. "We've seen a significant margin deterioration over the course of the past 12 to 18 months, but through our efforts and these operational improvements, we've seen a very encouraging and optimistic turn that is hopefully going to be self-sustaining here as we embed new systems and processes and technologies and innovations in place to really continue the performance."
The system has also invested over $50 million into its workplace, Ibrahim says.
"At Bassett, we invested over $50 million over the past couple of years and in wage programs, bonus programs, leadership development programs, workplace violence programs, [and] critical initiatives into our people, so that we can be a very competitive and attractive employer for folks to come and see us," he says. "
"Much of the statements are outdated and no longer reflect market realities in this important sector of the economy," the FTC said in a press release about the decision.
"Given the profound changes in these markets over the last 30 years, the statements no longer serve their intended purpose of providing accurate guidance to market participants. Rather, the Commission’s extensive record of enforcement actions, policy statements, and competition advocacy in health care provide more up-to-date guidance to the public."
"The Commission will continue its enforcement by evaluating on a case-by-case basis mergers and conduct in health care markets that affect consumers," the FTC said in a statement. "In making its enforcement decisions, the Commission will rely on general principles of antitrust enforcement and competition policy for all markets, including markets related to the provision of health care products and services."
Additionally, the FTC said that "guidance documents are non-binding and do not create legal rights or obligations. Antitrust enforcement and competition advocacy in healthcare remain important parts of the FTC mission, and the Commission will continue to vigorously enforce the antitrust laws in the healthcare industry."
The American Hospital Association released a statement against the decision, citing the withdrawal as unnecessary and reckless. Melinda Hatton, AHA general counsel and secretary, wrote:
"AHA is deeply disappointed that the FTC made the same mistake as the DOJ in withdrawing antitrust guidelines for hospitals and other health care providers. Over the years, AHA has urged both federal antitrust agencies to modernize the guidelines to accommodate the need for more flexibility in enforcement actions to support hospitals’ ability to navigate a changing health care landscape. And, AHA was instrumental in securing appropriate ACO guidance that allowed hospitals to fully participate in that important program. Withdrawing all the guidance without consultation with the field is both unnecessary and reckless."
As part of a strategic operating model change, the 23-hospital health system formed four submarkets across Ohio.
Cleveland Clinic has appointed four new submarket presidents in a move to align the system's operating model and support its 23-hospital footprint across Ohio. The operating model changes, the system said in a press release, "aim[s] to better align services and enhance quality, safety, and patient experience across all locations."
Effective August 1, Scott Steele, MD, MBA, will serve as president of the main campus; Brian Harte, MD, will serve as president of the south submarket; Richard Parker, MD, will serve as president of the east submarket; and Neil Smith, DO, will serve as president of the west submarket.
Additionally, most of the hospital president roles will transition to the new VP and Chief Medical Officer role where they will continue to be responsible for running the individual hospitals.
"These leaders will play an important role as we shape healthcare for the future," Tom Mihaljevic, MD, the president and CEO of Cleveland Clinic, said in a statement. "Our goal is to deliver consistent care everywhere that we serve patients, and we are always pursuing better ways to serve others while staying true to our mission."
Steele, who will serve as president of the system's 1,400-bed main campus in Cleveland, joined Cleveland Clinic in 2016. He is currently a professor of surgery through the Cleveland Clinic Lerner College of Medicine of Case Western Reserve University. Prior to joining Cleveland Clinic, Steele served as vice chairman for clinical affairs and division chief, colon and rectal surgery at University Hospitals of Cleveland, Ohio. Following his graduation from the United States Military Academy at West Point, he served 25 years in the Army, which included four combat deployments.
Harte, who has served as president of Akron General, a Magnet Hospital in Akron, since 2016, will continue to lead the hospital while also leading the system's south submarket. The south submarket includes Akron General, Lodi Hospital, Mercy Hospital, Medina Hospital, Union Hospital, and numerous family health centers and outpatient facilities. Harte previously served as president of Cleveland Clinic Hillcrest and South Pointe Hospitals.
Parker, who has served as president of Hillcrest Hospital, a Magnet Hospital in Mayfield Heights, since 2017, will continue to lead in that role while also leading the system's east submarket. The east submarket includes Hillcrest, Mentor, South Pointe, Marymount, and Euclid hospitals, and numerous family health centers and outpatient facilities. From 2015 to 2017, Parker also served as president of Marymount Hospital.
Smith, who has served as president of Fairview Hospital, a Magnet Hospital in Cleveland, since 2013, will continue to lead the hospital while also leading the system's west submarket. The west submarket includes Fairview Hospital, Avon Hospital, and Lutheran Hospital, and numerous family health centers and outpatient facilities. Previously, Smith served in additional leadership roles at Fairview Hospital, including VP of medical operations, chief of staff, and assistant chief of staff. He also maintains an active private practice in internal medicine.
Steele, Harte, Parker, and Smith will report to Donald Malone, MD, who serves as EVP of the northeast Ohio market.
"These physicians are all experienced, proven leaders who care deeply about their communities," Malone said in a statement. "The formation of these submarkets will allow them to oversee more strategic coordination of care and services to better serve patients in these regions."
Cleveland Clinic opened its newest hospital, Mentor Hospital in Lake County, last week on July 11. The hospital will serve patients who require shorter hospital stays and outpatient procedures. The hospital also has lab and imaging services, 34 inpatient and observation rooms, 23 outpatient rooms, 19 emergency department beds, 12 pre- and post-anesthesia care beds, and four operating rooms.
The number of deals are on-par with the transactions announced in Q2 2019 and 2018 and include three "mega merger" deals.
Healthcare merger and acquisition (M&A) activity has increased, bringing the number of deals back up to pre-pandemic levels, according to the newest Kaufman Hall M&A Quarterly Activity Report.
From April through the end of June 2023, there were 20 hospital and health system M&A transactions announced, making this the highest number of transactions announced since Q1 2020.
The number of deals is "on par" with the 19 transactions announced in Q2 2019 and the 21 transactions announced in Q2 2018. It's also an increase from the 15 transactions announced during Q1, 2023.
Of the 20 announced transactions during the past quarter, the acquiring or larger party in the deals included:
8 nonprofit health systems
4 investor-owned health systems
2 religiously affiliated organizations
4 academic/university-affiliated organizations
1 governmental organization
1 academic organization partnering with multiple nonprofit organizations
The total transacted revenue is also in line with pre-pandemic activity levels. During Q2, the average size of the smaller party by annual revenue remained elevated, Kaufman Hall says. The average size of the seller or smaller party, measured by annual revenues, was at $664 million. This is down from the record-breaking year-end average of $852 million in 2022.
This data slightly dilutes the impact of three "mega mergers" that were announced during the quarter. These "mega mergers" include entities in which the seller or smaller party has an annual revenue of more than $1 billion.
Milwaukee-based Froedtert Health and Neenah-based ThedaCare announced on April 11 that the systems signed a letter of intent to combine the systems. Following the merger, the 10-hospital Froedtert system in the southeast and the 8-hospital ThedaCare system in the northeast of the state plan to operate under their established brands and names.
Megasystem Kaiser Permanente and Pennyslvania's Geisinger Health announced on April 26 plans to merge, with Geisinger to become the first hospital under KP's newly created but separate, value-based care affiliate, Risant Health. According to the deal, Geisinger will keep its name and mission and will continue to work with other health plans, employed physicians, and independent providers. At the same time, Geisinger will tap Risant's value-based platform to maximize practices in care model design, pharmacy, consumer digital engagement, health plan product development, and purchasing.
BJC HealthCare of St. Louis and Saint Luke's Health System of Kansas City signed a letter of intent on May 31 to explore a merger that would create the largest health system in Missouri. The systems are based in Missouri's two biggest cities, with headquarters located about 250 miles apart. The 28 hospitals and scores of clinical venues created by the consolidated system, if approved by state and federal regulators, would serve "two distinct geographic markets," the systems say.
"As capabilities become an increasingly compelling factor in partnerships and mergers, hospitals and health systems should focus on developing unique capabilities that would make them a strong partner, whether or not they are currently seeking a partnership," the report concludes. "This strategy will help organizations differentiate themselves within an increasingly competitive healthcare market and enhance their options as that market continues to evolve."
The two organizations, which recently signed an LOI, hope to complete the merger in early 2024.
Aspirus Health, a nonprofit health system based in Wausau, Wisconsin, and St. Luke's, a nonprofit health system based in Duluth, Minnesota, announced this week that the two organizations have signed a letter of intent to come together as a single organization.
Through the deal, which the organizations are calling an "affiliation," St. Luke's and Aspirus Health would combine to create a 19-hospital system, hoping to expand access to care across northeastern Minnesota, northern and central Wisconsin, and the upper peninsula of Michigan.
St. Luke's, which serves a footprint across northeastern Minnesota, northwestern Wisconsin, and the upper peninsula of Michigan, currently has 2 hospitals, over 40 primary and specialty care clinics, and 2 pharmacies. Aspirus, which serves a footprint throughout Wisconsin and upper Michigan, currently has 17 hospitals, 75 clinics, home health and hospice care, pharmacies, critical care and air medical transport, medical goods, nursing homes, and a large network of physicians, as well as a health plan for Wisconsin residents.
According to the organizations, the affiliation between the "like-minded" systems will combine their assets and improve and expand healthcare services, increase collaboration and investments, provide growth opportunities, and extend the Aspirus Health Plan's offerings to Minnesota residents.
According to a FAQ page about the deal, the organizations say the merger won't increase costs for patients: "Aspirus has a proven track record of keeping costs lower than most other health systems in Wisconsin, and this has continued to occur when it affiliates with other health systems."
The deal's next steps include a definitive agreement, due diligence, regulatory review, and approvals. The systems hope to complete the merger in early 2024.
Health System Leader Statements:
"We envision a future where access to excellent health care is easier and more seamless for patients. Aspirus has a history of being nimble, innovative, and forward-thinking in how we deliver care for the communities we serve," Matthew Heywood, president and CEO of Aspirus Health, said in a statement. "We welcome the opportunity to expand into Minnesota with St. Luke’s and look forward to learning from one another and building upon our collective strengths to benefit our teams and patients."
"From our founding days in 1881, St. Luke's has remained patient-focused above all else. Joining forces with Aspirus Health enables us to expand access and better support clinical staff to reach even more patients," Nicholas Van Deelen, MD, Co-president/CEO and CMO for St. Luke's, said in a statement. "The like-minded missions of St. Luke’s and Aspirus are rooted in serving people — our patients and the people who care for our patients. It is with people in mind that we make this bold move to grow in a way that maintains our exceptional quality and patient experience."
"Evolving community needs require us to find new and innovative approaches to delivering care. The strength of Aspirus Health will enable St. Luke's to accelerate investment in our communities and expand our impact faster than we can on our own," Eric Lohn, Co-president/CEO and CFO for St. Luke's, said in a statement. "Joining with Aspirus Health will benefit our patients, our staff and our broader network. It will bring new ideas and build a best-in-class care network that people can count on for generations to come."