The role of a health system chief executive today will be markedly different within 10 years. The oft-used phrase in healthcare, “We need to focus on our core business,” will take on a radical new meaning.
Today the end game for healthcare leadership is the financial sustainability of brick and mortar hospitals while trying to anticipate when the tipping point between sick care and value-based reimbursement will take over.
Within 10 years, the brick and mortar assets, while essential in some form, will probably not be the centerpiece of a health system. Health system CEOs will oversee a myriad of health service businesses necessary to ensure that patients are healthier and less reliant on costly inpatient care in a business climate that is driven by accountability for outcomes, quality and satisfaction.
In the past, many hospitals that ventured into related healthcare businesses like home health, long-term care, mobile diagnostics, insurance products, wellness programs, emergency medical services (ambulances) and physician practices, ended up selling them to stem major financial losses because the organization did not master the nuances of reimbursement or unlock the secrets of managing a non-inpatient business. In the near future, some variation of that aforementioned mix of services may be exactly what is needed for health systems to profit under a value-based purchasing environment. Those who argue that venturing into diverse business lines will never happen again need only to find some back issues of Modern Healthcare in which CEOs swore they would never make the mistake of straying from their core business again, most especially acquiring physician practices. Today, hospitals are buying physician practices at a high rate of speed. So, history does repeat itself.
[Tweet “Today CEOs face competing demands on their time: dealing with the financial pressures of today while trying to plan for the future.”]
Today CEOs face competing demands on their time: dealing with the financial pressures of today while trying to plan for the future. The CEOs who use the demands of “today” as an excuse for not planning for “tomorrow” will probably not survive. CEOs must move away from their historical comfort zone and perfect the art of looking around the corner.
History may afford leaders some options to offset losses from brick and mortar revenue that has historically defined our business model.