Things That Keep Hospital CEOs Up at Night!

If you’re to ask hospital CEOs what issues keep them up at night, the scope of answers would be as varied as the types of hospitals and health systems, they operate. The challenges facing rural hospitals differ from those in urban settings, and large-scale systems have a variety of challenges not faced by standalone hospitals, and vice versa. But, overall, patterns would emerge. Not surprisingly, the issue of most concern is financial challenges. With the industry shift to a pay-for-performance model and the changes happening with reimbursement, the financial challenge continues to take center point. Under financial challenges, inadequate funding for capital improvements, are clearly foretelling at least another year of reduced or scaled back new building projects. Healthcare reform implementation is the second concerns. Under this category, the issue directly map back to the built environment, including reducing operating cost, understanding how to avoid readmissions, moving to electronic medical records, and preventing avoidable infections. Tied with local government or joint commission mandates for third place is the issue of patient safety and quality. More than half of its subcategories are to be improved outcomes, like reducing healthcare associated infections, preventing never events and medication errors, redesigning the care process, and engaging physicians in improving patient safety.  At the Healthcare Design Conference in 2015, it was evident that many vendors are focusing on solutions to some of these top concerns. The exhibit hall showcased products designed specifically to reduce noise; facilitate communication between caregivers as well as between caregivers, patients and their families; and stop the spread of infection and reduce falls and medication errors. But how many of the CEOs are aware of the great work being done to address their concerns. It might only be a few; with so many concerns keeping them up at night, it’s likely not a realistic expectation that they’d be familiar with the growing body of research, products, and design solutions.

Hospitals are adapting to change as fast as they possibly can, keeping up with the race to manage margins, predict reimbursement trends and maintain quality of care and profitability. In addition to these challenges, new factors are emerging, such as establishing a competitive edge and attracting and retaining patients. Even, the language of healthcare is changing. When was the last time you heard the expression “fee for service”? Such terms are being replaced with greater frequency by “population health management” or “accountable care.” Before we proceed further, let’s see what business disruption is going on in baking sector. Imagine you’re walking into a bank and being greeted by a robot that uses facial recognition to identify you and your standing in the bank, and possibly predict the service you've come in for… It's not science fiction now; this is already a reality in Japan. Here's how business as we know it is about to be disrupted for good. The answer to the question of “what’s keeping hospital CEO awake at night” stands in the vast increases in unstructured and social data, and the increase in pace of disruption. There’s a current trend of massive disruption in all business, especially in traditional businesses. The change is in relation to the ecosystem of disruption. Now, instead of ‘building walls’ and trying to defend against the change disruption brings, businesses need to embrace the change, especially based on the current pace of transformation. Become more agile and customer-facing with streamlined operations. The focus has been on customers for the past decade but disruptors have put those customers right at the centre of the change, leading to a massive gap many traditional organizations need to address.

The healthcare industry has changed irrevocably and hospital CEOs are grappling with new responsibilities as well as the complexities of creating a new continuum of care. Hospitals are under financial pressure on other fronts as well, challenging their executives to balance the imperatives of patient safety and satisfaction with financial stability, all of which create substantial risk. Then there are the operational challenges that keep hospital CEOs awake at night, including rising costs, declining reimbursements or bad debt and labor shortages. Patient consumerism has been a factor, patient’s judge a hospital by the quality of their overall experience, not just by the quality of the medical care only. The result is that hospitals are competing for patients by offering unconventional services such as community classes, 5* catering services, day care services and exercise classes, which may not help the bottom line but promote a positive impact of the hospital. For the top level, the engagement in new lines of business that are not part of the core presents new challenges. Existing systems are being pushed to the breaking point, and administration of these new models requires next-generation healthcare IT, strategy and new ways of thinking to make them automated, scalable and cost-efficient. All of these strategies are intended to benefit the patient and consumer as they are now the driving force toward providing a better quality care in the appropriate setting at the appropriate cost, a win for all.

Electronic health records and staffing shortages are on the minds of hospital CEO, according to a recent poll conducted by healthcare technology company Picis. The results indicate physician and nurse recruiting and retention is the most pressing concern for hospitals. Only, in the United States is currently facing a shortage of 400,000 nurses and, as cited in a 2006 report titled "Physician Supply and Demand: Projections to 2020," the U.S. Health Resources and Services Administration has projected a shortfall of 55,100 physicians by 2020. Besides, Tax-free Middle East market attracting physician and nurses to work there. Besides, Australia and Canada are attracting physicans with easy migration policy to relocate. These are making addition pressure for hospital CEO to retain their staff. According to Picis' poll, 47 percent of respondents believe technology systems that allow staff to spend less time on administrative tasks will help staffing recruitment and retention. Today's caregivers are under intense pressure and are forced to do even more, and more regulations, more paperwork, more direct patient care, but without the manpower to support it. The rollout of electronic health records ranks as the second biggest concern, raising additional questions about how the role of government-funded EHR initiatives and joint ventures from companies such as Google and Microsoft will affect the future of hospital technology systems. Nearly 90 percent of poll respondents believe EHRs are going to revolutionize the healthcare system. Additionally, 55 percent said patients would be more likely to visit a hospital using an EHR system, versus one that uses paper systems.

The health care field is drowning in data. But are hospitals really collecting the correct information that they’ll need to transform the work they do? And, in an ideal world, what would measurement science look like for providers? For Nancy Howell Agee, CEO of the eight-hospital Carilion Clinic health system in Virginia, data measurement is a concern that keeps her up at night. “I do worry about those things that we aren’t measuring, and I think there are some real issues related to delay in diagnosis that we don’t even know about until somebody gets frustrated. How often is it the patient’s responsibility to go from one venue to another to collect their information, from providers who aren’t always using the same [electronic health record], or systems that aren’t talking to each other?” And even when hospitals do have data, there are questions about the quality. Hospitals have lots of data, but it’s not reliable, timely and relevant. Health care needs much more information reported by patients, covering critical pain points along the care path such as diagnostic accuracy, access and transitions of care, and more…

Another top concern of hospital and health system executives is how to engage physicians in reducing clinical variation, according to The Advisory Board Company's Annual Health Care CEO Survey. The survey found that the top areas of concern for hospital and health system executives were: (1) Engaging physicians in reducing clinical variation (53%), (2) Redesigning health system services for population health (52%), (3) Meeting increasing consumer expectations for service (47%), (4) Implementing patient engagement strategies (45%), and (5) Controlling avoidable utilization (44%). Meanwhile, 31 percent of respondents said they were extremely interested in developing consumer-focused pricing strategies to provide patients with accurate price estimates for services. Two concerns—strengthening primary care physician alignment and utilizing direct-to-employer contracting fell from the list of the top five concerns.

Managing change is one of the hardest parts of being a hospital CEO. These men and women are confronting pressing decisions, sometimes under tight deadlines, that may make or break their organization. Questions over hospital consolidation, accountable care organizations and physician alignment strategies only become more urgent when paired with decreased reimbursement. These issues affect all hospitals to some extent, regardless of their size or shape. CEOs can feel particularly distressed when there is no right answer. Each organization's micro-economic climate, organizational culture, and strengths and weaknesses will help determine priorities have identified five issues leaving hospital CEOs most concerned. Based on conversations with hospital CEOs, healthcare consulting firm Huron Healthcare ranks the top 5 issues keeping healthcare CEO up at night: 

1. An immense amount of market-driven and reform-driven change is coming. How will I prioritize the various cost and quality imperatives my hospital will need to accomplish to thrive? 
2. How will I reach beyond the walls of my hospital to public health authorities, non-profit groups and others? How will I engage these key community partners in helping to improve the health of the patient populations my hospital serves?
3. How will I move my hospital toward true clinician alignment and integrated care delivery?
4. What does "accountable care" mean for my hospital? Are market and reform forces moving us towards population health management in a broad sense, or should we focus on the created of integrated care models for certain populations?
5. How will I effectively lead my hospital through the transition from the volume-based payment model to a value-based payment model?

Key issues that are keeping CEOs awake at night include creativity and innovation at 63 per cent, while cyber security came in second at 57 per cent, according to CEO global trends report. Managing knowledge workers, ethics and responsibility requirements, sustainable business and consumer demand changes are also high on the ‘sleepless scale’. The evolving nature of business and the proliferation of new technologies are steering organizations like never before. The ability to innovate from within, then quickly deliver results to customers directly or to the wider market, make the difference between success or failure. It is clear that there is a greater need for development of core skills within companies, and harnessing the natural talent of employees, who already understand the nature of the business, is key. While this list of CEO concerns wasn’t surprising, what may surprise some is that healthcare transportation could have bearing (positive or negative) on all of the troubling issues. For example, by taking a hard look at and assessing healthcare transportation, organizations can “prioritize cost and quality imperatives” while allowing “their organization to thrive?” CEOs whose organizations need to deliver “higher quality, more affordable, more accountable care models” can use healthcare transportation data to help their leadership teams make informed decisions. Appropriate tracking technology that ensures the safety of patient-critical items can “help improve the health of diverse patient populations.” In other words, what can appear too many as the seemingly simple practice of transporting healthcare materials actually does have serious implications on an organization’s productivity, risk and bottom line. The growing pressure to simultaneously control costs and improve care quality is enough to turn even the heaviest sleeper CEO into an insomniac. If you work or practice in a hospital setting, you’ve probably noticed or even been the one to implement some reform-driven changes to your facility’s operational processes. But, what’s really driving those changes and is there a better solution? To find out, let’s take a closer look at three major burdens weighing on the minds of today’s hospital CEOs:

1. Unplanned Hospital Re-admissions: With an annual price tag of $26 billion for Medicare beneficiaries alone, re-admissions represent one of the costliest problems in the US healthcare system, not only in terms of dollars and cents, but also with respect to the overall quality and value of the care patients receive. However, readmissions also represent one of the most preventable setbacks in the path to coordinate patient care. So, it’s no surprise that recent reform initiatives including the ACA’s Hospital Readmissions Reduction Program (HRRP) have zeroed in on keeping readmissions to a minimum by holding hospitals financially accountable for their readmission rates. Specifically, the HRRP:

• Reduces Medicare payments for all patients if a hospital has a higher-than-expected 30-day readmission rate for patients with specific clinical conditions.
• Includes readmission measures for heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease (COPD), and total hip and knee replacements.
• Assigns penalties based on a hospital’s deviation from national averages for each type of care episode.

According to this Kaiser Health News article, hospitals paid a total of $420 million in readmission penalties between 2011 and 2014; and based on the trend toward value-based payment, it’s safe to say the regulatory stakes will only continue to get higher with time. Re-admissions also factor into other value-driven payment models and regulations, including the recently adopted Comprehensive Care for Joint Replacement (CCJR) model, which is expected to save the US healthcare system $153 million. And if you’re a hospital CEO or other healthcare executive and your facility is on the losing side of either of those totals then I’m bookmaking you’re tossing and turning your way through at least a few sleepless nights. 

2. Post-Discharge Patient Safety: “Patient-centered care” is becoming somewhat of a buzz-term in the healthcare space. That’s because one of the overarching goals of healthcare reform is to create a collaborative environment in which providers work together to ensure each individual patient receives the right care, from the right provider, at the right time. What’s the outcome? Providers like hospitals increasingly are on the hook for what happens to their patients further down the care continuum. And one of the biggest barriers to patient success is following hospital discharge? Patient safety or a lack thereof, is to be more precise. But, how can a hospital possibly control what happens to a patient post-discharge? The easy answer to that question: Hold off on releasing patients who have not yet demonstrated the level of function necessary for success in a home environment. That’s easier said than done, though, as Medicare (the primary insurance for many people over the age of 65) not only represents a substantial portion of most hospitals’ total revenue, but also reimburses hospitals on a case basis meaning the hospital receives a predetermined dollar amount for an entire inpatient episode of care, regardless of the length of stay. The result: The longer the hospital waits to discharge a patient, the more money it loses. But, if a patient especially who is part of the readmission-vulnerable Medicare population leaves the hospital too soon, there’s a chance the hospital will incur a readmission-related fine.

3. Alternative Payment Model Uncertainty: The US Department of Health and Human Services (HHS) has a goal of tying 50% of Medicare fee-for-service payments to alternative payment models by 2018. One such model that’s gaining popularity across the healthcare space especially in hospital systems is the accountable care organization (ACO). Essentially, an ACO is a group of doctors, hospitals, and other healthcare providers charged with coordinating their efforts to ensure the delivery of high-quality, high-value care. Like other reform-driven alternative models of payment and care delivery, ACOs encourage collaboration among all members of a patient’s care team, thus promoting the elimination of unnecessary or duplicate services. But how? By supplementing traditional fee-for-service payment with incentives both positive and negative for efficiency and quality. For ACO participants, that means doing everything possible to keep patients from being admitted or readmitted to the hospital.From a purely financial standpoint, though, ACOs present a unique puzzle for hospitals, which must balance the incentives received for keeping patients out of the hospital with the revenue generated from admitting patients to the hospital. And for hospital executives, that problem isn’t likely to drift away anytime soon no matter how many sheep they count.

Besides the major equipment breakdown, CEO also concerns about the sentinel events that takes away their sleep at night. A sentinel event is defined as an undesirable and unexpected incident involving death, serious physical or psychological injury or the risk thereof, or has the potential to adversely affect the service of the hospital. Such events are called “sentinel” because they signal the need for immediate root-cause analysis (RCA) investigation and response. The phrase, “or the risk thereof” includes any process variation for which a recurrence would carry a significant chance of a serious adverse outcome. The following are the top 10 sentinel events that occurred in 2015, according to the Joint Commission's most recent sentinel event data summary:

1. Unintended retention of a foreign object events (116)
2. Wrong patient, wrong site, wrong procedure events (111)
3. Fall-related adverse events (95)
4. Suicide events (95)
5. Dialysis-related adverse event (76)
6. Operation/post-operation complication events (76)
7. Other unanticipated event (including asphyxiation, burn, choked on food, drowned or found unresponsive- 56)
8. Unassigned (54)
9. Delay in treatment events (46)
10. Perinatal death or injury events (42)

Few listed sentinel events that was recorded between 2012 and 2014 are quite similar with these top ten lists. However, these are three events also crucial for taking away the sleep of CEOs at night.

11. Criminal events (assault, rape, homicide: 2012 — 43, 2013 — 52, 2014 — 29)

12. Medication error events (2012 — 42, 2013 — 38, 2014 — 12)

13. Fire-related events (2012 — 15, 2013 — 9, 2014 — 7)

When it comes to the economy we are not out of the woods by any means yet. Despite the increasingly positive posturing to the contrary CEOs should remain at this time cautious and think very carefully about how a range of potential scenarios, might affect their strategy and planning. CEO would be staying up all night, every night, if they worried about the economy and still not be any closer to achieving their goals for the organization. Instead, as CEOs, we need to ensure our services meet our customers’ needs now and in the future, that we offer them at affordable prices while still making a profit for our shareholders, and that we treat the people within our organizations as the valuable business partners they are. The economy will swing, but if we take care of these basics first, and concentrate on ensuring that our organizations are agile, we will be able to take full advantage of opportunities that such swings in fortune provide.

From a personal leadership perspective most CEOs today admit, in private at least, feeling overwhelmed by their own to do lists. Email overload is a widespread problem, stress levels are reaching new heights, the ‘urgent’ crowds out the ‘important’.

If you are a CEO ask yourself—what can you delegate? What can you ditch? Who can better serve as your Gatekeeper? How can you make sure you carve out essential thinking time?

As CEO, your to-do list is long. “Urgent” should only be about important. If it isn’t, you may be experiencing what calls a false sense of urgency and should be avoided like the plague. Take the advice about delegating. But caution against relying too much on your “gatekeepers.” If they are too good at their jobs, you might miss the terrific opportunities your employees, patients, and changes to the environment can present.

Relax! See you’re not only alone to fighting against those stresses and challenges. It’s time for you to get some sleep. ‘Good night-Sweet Dream!’