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12 February, 2016 Posted by John G. Self Posted in Healthcare
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The Evolving Community Hospital Landscape: CEO or Salesman?

Posted February 12th, 2016 | Author: John G. Self

I did not go into healthcare administration to be a salesman.

Some rural and community hospital executives will actually make that statement — out loud — while many more have thought it more than a couple of times.  Probably in utter frustration. They got their MHA or MBA after all, to run a business, not be a local huckster trying to woo business/customers.

CEO as salesmanThe problem is that the world as we know it for CEOs of rural and community hospitals is rapidly changing in dramatic ways.  Lower  utilization volumes means that reimbursement changes from government and insurance companies have a more significant effect on the small hospitals.  Larger community medical centers, with larger cash flows, can tolerate these financial nicks much easier.

Now, as the still financially undefined concept of population health care makes it way into the strategic plans of regional health systems anxious to capture as many patients as possible, and as Accountable Care Organizations begin to gain traction, the ability of rural and community hospitals to compete for their own markets at a time when yet another tectonic shift in the way healthcare is delivered and reimbursed, is in question.

CEOs of these vulnerable yet critical healthcare resources are in the spotlight.  The decisions that they make, or fail to make, over the next five years, will determine whether their organization survives, sees drastically curtailed clinical services (read: doc/mid-level practitioner in the box)  or is forced to close.

No one is immune. Recent news reports tell the story of once successful hospitals in smaller communities being forced to cease operations, the victims of a variety of  leadership/strategy missteps, poor or unengaged physicians and apathetic residents.

And, importantly, regional health systems that have a growing appetite to offset their own declining inpatient admissions by casting a wider net for “good” patients are putting intense and very real pressure on rural hospitals to hold on to their market share.

While the implementation of DRGs in the mid-1980s and the later impact of the infamous Balanced Budget Act in the late 1990s were crushing blows to rural community hospitals forcing thousands to close, this new market-based assault for their core patients may be the final battle for hundreds of these facilities scattered across America.

This is a fight for survival in which I have more than just a passing interest.  Yes, I have economic concerns since some of these organizations are search clients, but I have a deeper belief that these hospitals are an important tool  — and potentially important test laboratories — in the overall system to deliver higher quality, safer and lower cost healthcare to millions of Americans.

The answer for these hospitals is not a better reimbursement system that reflects the special needs and challenges of these facilities, although that would be helpful.  No, the sustainable answer must come from the counties and cities where these hospitals are located.

If the population is not motivated to fight for and support the physicians and the hospitals, to demand better when clinical personnel or scope and quality of care is lacking, then it is not if the hospital will close, but when.

So who is to lead the fight? Who is responsible for motivating the population, the medical staff and the employees?  Well, hopefully, there is a group of people who care passionately about local healthcare.  But, in most cases, it starts with the CEO.

If the CEO is not selling the vital role of the hospital for the betterment of the community day in and day out, then chances of a sustainable grass roots wave of support are very slim.  Going to the Lion’s Club or Rotary several times a year and talking about what is happening at the hospital is not what we are talking about here.  You need to become a full-time sales representative, looking for ways to lock in your community for your hospital.

To get there you must begin with a strategic plan that carefully looks at how many patients leave the market and what you can do to retain some percentage of those patients.  But more important, while the plan looks at the here and now, you have to be willing to broaden the boundaries of your box in ways that address the future – value-based, not volume-based, inpatient care.

The key drivers will be lower costs, high quality, exemplary service, and innovation — doing things that are not on your service portfolio radar, like  community medicine  house calls.

What are your thoughts about what you can do, not what you cannot do?

© 2017 John Gregory Self

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