How to Overcome Major Obstacles and End Up Better and Stronger

One Louisiana health system’s journey

Over the past several weeks, we have seen a number of natural disasters in the US. Could your organization survive an unprecedented natural disaster, like Hurricane Katrina, and eventually turn that into something positive? That’s what the Advisory Board’s “Lessons from the C-Suite” asked of Warner Thomas, president and CEO of Ochsner Health System, Louisiana’s largest health system.

Immediately following the storm, Thomas says that Ochsner and its board realized that to even maintain operations they had to think through how to get evacuated staff back into the city to relieve staff that was onsite during and following the storm. Beyond those immediate logistics, Thomas says their organization had another team that worked on their “go-forward” strategy, which included outreach to physicians to see if they were returning to the city and if they needed a place to practice. Ultimately, Thomas says that the devastation of the hurricane strengthened both Ochsner’s culture and resolve to restore and expand healthcare in New Orleans and the region.

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No Small Thing – The Growth of the HealthCare System

Mergers and acquisitions are all over the healthcare news, and have been for a while now. As described in a recent article in Modern Healthcare, hospitals and other healthcare facilities are coming together to form “sometimes behemoth” systems with the ultimate goal to achieve scale to create operational efficiencies.

The article gives examples of failures and successes and highlights many of the challenges that come with rapid growth. Overall, Modern Healthcare concluded that “hospital system executives continue to pursue size and scale through mergers despite the evidence from some recent deals that problems undiscovered during due diligence—or from culture clashes—may make the marriage hard to consummate.”

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Can Healthcare Continue Its Outperformance Streak?

As a sector, healthcare has had a good run. According to S&P, “The health care sector has outperformed the broader market over each of the last five years.” That’s the good news.

Yet, despite a stable outlook, and even optimism that healthcare can continue to outperform the broader market in 2016, S&P notes some challenges.

The nonprofit sector’s stability is predicated on a boost from Medicaid expansion and the insurance exchanges under the Affordable Care Act. But, there are negative pressures at nonprofits, including difficulty with poor IT installation, weaker patient volumes and the cost of absorbing physician practices. “The strongest hospitals and health systems are likely to just hold existing margin and reserve levels, while weaker providers will likely continue to see operating margin and cash flow erosion and eventually balance sheet pressure.”

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Systemness: Integrating to deliver seamless, cost-effective, high quality care

Systemness is a term that is being used more and more frequently in healthcare. The word itself is a bit clumsy, but its meaning very much affects our industry.

A recent post from the Advisory Board Company describes it this way, “at its essence, systemness is about integrating all aspects of a health system’s governance, operations, and workflows—across all technologies, clinicians, and locations—to deliver seamless, cost-effective, high-quality care.”

The Advisory Board recently conducted a survey of over 150 health system executives, and the conclusion was that those leaders said, “in no uncertain terms that their organizational success depends on greater integration, and greater integration depends on their ability to do concrete things that reduce variation, improve coordination, and improve the flow of information.”

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What Does 2012 Hold for Healthcare?

The new year encourages us to make a few predictions and set goals for the coming year. As 2012 gets underway, I think it’s safe to say we all expect it to be another demanding year in healthcare.

HealthLeaders recently posted an article titled “4 Unpleasant Predictions for 2012.” While I’m not sure we want to start off the New Year with unpleasantness, a realistic approach is crucial. Using HealthLeaders’ annual survey, as well as her own conversations with healthcare CFOs, the author, Karen Minich-Pourshadi made her predictions for the top concerns facing healthcare financial leaders in 2012.

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