Survival of the Fittest: Is Your Healthcare Organization Adapting?

Integration is a topic I am very interested in. It is a large part of what we do and I pay close attention to integration-related discussions and articles. Recently, I came across this HealthLeaders interview with Joe Gifford, MD, the CEO of the Providence-Swedish Health Alliance, which speaks to this very topic.

With the continual changes the healthcare industry has experienced, the mantra of “adapt or die,” has been heard before. But according to Mr. Gifford, that analogy to evolution biology really rings true. His take? Only organizations that take chances (adapt) will survive.

Healthcare Providers Are Feeling the Squeeze: Cost-cutting alone just won’t cut it

“Healthcare providers as a group continue to operate with slim and shrinking margins,” according to recent analysis from Modern Healthcare. Sadly, that’s not a surprise to most of us. The study—which included acute-care, post-acute care, rehabilitation and specialty hospital groups as well as stand-alone hospitals— found that the average operating margin in 2013 was 3.1%, which was down from 3.6% in 2012. Over 61% of organizations saw their operating margins erode over the previous year.

While we’ve seen this coming, the news is sobering. And analysts are skeptical that the worst is over. According to Modern Healthcare, all three credit-rating agencies hold negative outlooks for the not-for-profit healthcare sector.

Create New Organizational Structure to Successfully Reduce Costs

Annual cost reduction targets have most healthcare organizations scrambling. Despite concerted efforts, many internal cost reduction initiatives “fail to produce the level of savings required” as Liz Kirk writes in Healthcare Finance News.

Why is that? Many factors can contribute to the success or failure of an organization to achieve savings’ goals, but the most common mistake is not taking a holistic approach. Ms. Kirk contends that rather than a conventional cost reduction approach lead by the CFO, a successful initiative should include the financial and operational senior leaders, as well as support teams and cost leaders. The key is to effectively balance quality and patient satisfaction with savings.

Integration is critically important, yet many healthcare organizations aren’t prepared

We are well aware that the healthcare industry is in a time of tremendous consolidation with a greater than 50% increase in consolidation just since 2009. Since that activity is expected to continue through 2014, we wanted to get a sense for how successfully hospitals and health systems have been at integrating new facilities. To do that, MedSpeed conducted a survey in conjunction with HealthLeaders Media’s Leadership Council.

The survey polled 138 senior leaders across the healthcare spectrum, including hospitals, health systems, physician practices and payer organizations. Of those surveyed, 73% said that physically integrating materials and supplies is either “critically important” or “important” to their organization’s success in providing quality care.

ROI: Look Beyond Financial to the Intangible Benefits

I was very heartened by a conclusion drawn at the recent HealthLeaders’ CFO Exchange. Apparently, these healthcare CFOs together reached the conclusion that ROI is more than financial.

A report from that roundtable specifically discussed the implementation and costs associated with Electronic Health Records (EHR). One of the CFOs said, “It’s hard or nearly impossible to justify the investment needed for a state-of-the-art EHR with hard-dollar savings.” He went on to point out that to really look at the return on investment: “You have to look beyond that to the intangible benefits, the improvements in delivery of care and positioning your organization to be competitive in the future.”

Fear Stymies Innovation…BUT it shouldn’t

Things move forward at a rapid pace because of innovation and we’ve been hearing for quite a while now about the need for greater innovation in healthcare. Innovation in healthcare has been challenging due to many factors, including the fast pace of change and a general fear of failure.

Last week in Becker’s Hospital Review I read a post discussing healthcare’s fear of failure and how that stymies innovation. The article’s author interviewed Louis Burns, CEO at Intel-GE Care Innovations, who discussed the importance of being a disrupter in your own industry, if change is indeed going to happen. To overcome this innovation stagnation in healthcare, Mr. Burns says that healthcare leaders need to take big risks and reimagine the healthcare delivery system.

Healthcare transportation in 2015 and beyond: What does the future hold?

The last of my blog posts discussing our roundtable at the Fall 2012 IDN Summit covers our participants’ commentary on what the future holds for them. What became clear from our discussion with these supply chain leaders is that health systems can no longer get by with the status quo.

Everyone acknowledged that doing things the way they’ve always been done is not a recipe for success. Health systems need to pay attention to previously overlooked areas, such as healthcare transportation, to see how they can improve and simplify the supply chain and ultimately better integrate the entire organization.

Winds of change: As health systems expand, so must transportation operations

Here is the first of four installments stemming from the round table discussion with supply chain leaders that MedSpeed recently hosted.

One of the hottest topics the group discussed is how rapidly U.S. health systems are changing. Care is moving beyond the four walls of the hospital and health systems are growing quickly through acquisitions and strategic partnerships.

Hospitals and health systems will look very different tomorrow than they look today. Given that the reach of systems is much further than it was, managing the supply chain amidst constant growth creates a big obstacle.

What our supply chain leaders had to say, in their own words:

“I see a complexity that wasn’t there even a year or two ago. What used to be a very simple courier system

What Do Healthcare Supply Chain Managers Think? Part II – Introduction to our second roundtable discussion

In the spring, we conducted a roundtable discussion with top healthcare supply chain leaders to discuss their healthcare transportation needs. We had a lively, two hour discussion that left us with a key takeaway: supply chain leaders are looking for ways to transform their healthcare transportation operations from a tactical, commodity-based service to a strategic asset that can help them better navigate the changing healthcare landscape.

With the rapid changes we are experiencing in healthcare, we decided to conduct a follow up to see if the discussion has changed. So, at the 2012 Fall IDN Summit in Phoenix, AZ, we gathered another group of top healthcare supply chain leaders and asked them to talk about their current supply chain and healthcare transportation needs and challenges.

The Supreme Court has spoken: Now what?

Like many of you, I was in a meeting Thursday morning when one of the smart phones pinged with news of the Supreme Court’s ruling on the Affordable Care Act. And, I would imagine, like many of you, we stopped what we were doing to talk about it. No surprise there since this has been on the minds of all of us in healthcare and of many, if not most, of our fellow Americans. After all, no less perhaps than the future makeup of U.S. healthcare was at stake.

So, now that there is a decision, what does it mean? Well, regardless of political leanings or personal opinions, there are two main points of consensus, in my opinion:

Change management