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7 May, 2014 Posted by John G. Self Posted in Healthcare
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Market CEO: A New Meaning

Posted May 7th, 2014 | Author: John G. Self

Over the next five to 10 years, the term “market CEO” in healthcare will take on a new meaning. 

While no one knows exactly how healthcare reform and the impact of deficit reduction will play out on how we deliver care and get paid for it, the trends are pointing to an entirely new business model.

Since the beginning of healthcare industry time, the title Administrator, Executive Director or Chief Executive Officer, referred to an individual responsible for operating a healthcare business largely defined by bricks and mortar and numbers of inpatient beds.  That definition is beginning to change with the rise in ambulatory care and diagnostics centers as well as the acquisition of physician practices.  But this is only the very beginning, many believe.

Over these next five to ten years, I believe, you will begin to see a more dramatic change as hospital CEOs become responsible for a market or a population group, not a building or buildings.   For healthcare executives who have spent their entire lives focused solely on the building and beds, this will be an unsettling period of time.

The regulations and care norms of today that cause the skeptics to judge these ideas as inappropriate or wild flights of futuristic fancy, will quickly fall away as structural reform, financial, and market pressures intensify.

Here are some of the changes I think we will see:

  • A full throat scramble for control of patient population groups and thus the flow of healthcare dollars. Hospitals or care management consortiums will sign up patients for their programs and guarantee care based on price, quality and satisfaction
  • Hospitals that do not own a health plan will need to affiliate with a system that does, or they will have to build, buy or rent one.  This will be an important part of managing the financial risk that is inherent in a population health management model.  Larger systems are already quietly acquiring those assets
  • The move to population health management will drive the need for a new kind of call center that is organized around a broader portfolio of clinical resources and strategies to proactively coordinate comprehensive community care management
  • Hospitals will develop business models to partner with large and mid-size employers to reduce treatment costs as part of their population health management programs.  They will receive less for sick/inpatient care and more for well care
  • Patient care services traditionally aligned with inpatient hospitals will move into the outpatient/home care arena. Telemedicine, with support of EMS paramedics and highly skilled home care nurse specialists, will become an important tool for this new acute home care model. The explosive growth in Medicare costs, coupled with the surging cost of healthcare, will drive this game-changing approach
  • Hospitals will acquire, or strategically affiliate, with ambulance providers and community care management professionals who will play an increasingly important role in reducing unnecessary ED visits as well as readmissions.  MedStar, Tarrant County’s innovative EMS system based in Fort Worth, has demonstrated that this strategy is effective.  In addition to pre-emptory house calls with certain patient groups, they have added Triage Nurses to their EMS dispatch center to coordinate care and transportation for patients who can be treated more appropriately in a clinic instead of using an ambulance for a routine doctor’s office (read:  emergency department) visit.  Their programs are saving millions of dollars annually.  By the way, MedStar changed its name to include the term mobile healthcare
  • Payers, including CMS, will bundle a broader range of provider payments for market/population segments — not just hospitals and physicians — as a way to drive accountable cost management.   This means that those businesses formerly known as hospitals will be moving to build, buy or affiliate with long-term acute care hospitals, home care agencies and durable medical equipment suppliers to ensure they have control over costs under a capitated payment system

This new market CEO model will require a broader knowledge base and leadership skills necessary to successfully operate a diverse portfolio of services that are completely outside the brick and mortar hospital that we know today.

For those who love change and the opportunity for unparalleled innovation, this will be an historic and rewarding period in healthcare.

© 2017 John Gregory Self

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