Today’s Big Idea focuses on two emerging trends that, when combined, will dramatically transform the healthcare industry — from our business model and how we take care of patients, to the impact these changes will have on our careers.
What are the two trends that will impact your career as we change how healthcare is delivered?
- A shortage of physicians, and
- Record spending on the exploding Medicare population that will force CMS to reduce costs by cutting payments to providers.
Lets take the cutting of payments trend first. Republicans in the House and Senate have already signaled their intention to reduce entitlement spending — focusing primarily on Medicare and Social Security — if the tax cut plan they just pushed through Congress does not produce the anticipated economic growth and the deficit widens. Whether the tax cuts are the reason — and yes, most economists say that plan will not pay for itself — or whether it is the anticipated explosion in spending on the growing numbers of Medicare recipients who will require increasing levels of care as they move past age 70, or both, healthcare providers will be expected to do more with less, and the doing more with less is part of what will impact your career. When successful health system CEOs talk about taking $500 million in expenses out of their operations over the next five years, that will certainly include fewer leadership, management and supervisory jobs. Industry consolidation has already taken its toll with the elimination of duplicative positions.
The loss of leadership jobs in healthcare is a reality and executives who want to stay in the game have to demonstrate three important traits:
- Consistent performance. You can excel in career brand management and in getting job interviews but you will not find sustainable stability if you do not exceed performance expectations.
- Flexibility. Being flexible encompasses a variety of issues, from working longer hours when required and sacrificing some family time to meet a critical deadline, to accepting a transfer to a new job or to another location. Yes, some companies will take advantage of their employees but the future of healthcare will be about having leaders who can produce results and will be valued. While all the talk about life-work balance is laudable and important, the economic realities of healthcare over the next five to seven years will dictate our quality of life in and outside of the workplace.
- Investing in a career network. This last point will become more important to you as you advance up the business ladder. Most executives do not invest the time they should in building a professional network to support their career development. In a hyper-competitive job market, with fewer quality professional opportunities, you must have a robust network to support a job search if you suddenly find yourself out of work. As a close friend of mine, the CEO of a large system recently said, there are going to be a lot of good people looking for jobs through no fault of their own. That is true. Transformation of an industry can be exciting but there is a cost.
The second trend that will impact the healthcare business model is the looming shortage of physicians.
In a recent white paper, physician recruiters Merritt Hawkins outlined six insights that will drive how we operate.
- Demographics matter. Patients 65 or older visit physicians more than those 30 or younger. With approximately 10,000 Baby Boomers a day qualifying for Medicare and Social Security, the cost outlay will rise and the demand for specialists will also increase.
- Government regulation in limiting our response. The physician supply is effected by the 1997 Congressional cap that was imposed on medical education funding. This has stalled the growth of medical residency programs. Residency programs have not kept pace with the population growth or medical school enrollment.
- An aging physician workforce. Forty-three percent of US physicians are 55 years or older. A tsunami of doctor retirements is on the horizon and the chances of avoiding significant impacts are not good. For example, certain physician specialities have a higher percentage over the age of 55. Seventy-three percent of pulmonologists are 55 or older. Psychiatry, non-invasive cardiology, and orthopedics are numbers two, three, and four on that list.
- Most of the physician recruiting is focused on specialists. Merritt Hawkins said 27 percent of its recruiting assignments were for primary care, 73 percent for specialists and advanced practitioners.
- Physicians are operating at or near capacity. A survey of 17,000 physicians revealed 81 percent were at capacity or overextended. Eighty percent of the specialists were are at capacity or overextended. On a personal note, a neurologist I know told me he never anticipated making as much money as he is making, but there is a cost: he has little quality time with his family. Meanwhile, he is being forced to turn patients away because he cannot accommodate them.
- Appointment wait times for specialists is growing. In a survey of five specialities in 15 metro markets, wait times have increased by 30 percent. In cardiology, for example, the average wait times for an appointment in 2017 was 21.1 days, compared to 16.8 days in 2014
Thanks to Becker’s Alia Paavola for her reporting on this white paper.
Now here are three more issues you need to to be aware of:
- Just because you have an MBA does not mean you are an effective leader. Employers are investing more time assessing candidate leadership capabilities. One issue: how much have you invested in your personal leadership development. Here is an important hint: having an MBA and Fellowship status in an organization like the American College of Healthcare Executives does not mean you are, or can be, an effective leader. Now is the time the time to invest in leadership development. If you are a former military officer, you know what I am talking about. The military puts private industry to shame in terms of their investment in leadership development. Oh, by the way, conferences on strategy do not qualify as leadership development.
- As you move up the ladder, as you achieve more success and earn a bigger paycheck, do not pull up the ladder behind you. I do not care how important you think you are, or how busy you really are, good leaders are always looking for the next generation of executives who can lead the charge. Leadership is not about seven figure incomes with great bonuses. The money is just a side benefit. Great leaders invest their time in helping younger executives navigate the challenging roadmap to success. Do you know which candidates are being called by recruiters? Those executives who have a history of offering a helping hand.
- As we approach the holiday season, Chanukah is drawing to a close and Christmas is just days away. This is a great time of the year to invest in thinking about your career. If you want someone to evaluate your resume, send me a copy at CareerTransitions@JohnGSelf.Com. This free review is my Christmas gift to you.
That’s it for this week. Check out my video on YouTube this Saturday from New York and my blogs on Tuesday and Wednesday.
And coming soon, the definitive book on executive recruiting. It will be available to you at JohnGSelf.Com at no cost.
Later today my wife and I are meeting in New York for three days of Christmas celebration in the Big Apple before we journey north to CT, to join our daughter, her husband and our two grandchildren for Christmas.
From my family to yours: Happy Chanukah, Season’s Greetings and Merry Christmas.
Thank you for being a follower of this podcast and our other content offerings.
From the state capital of Commonwealth of Pennsylvania, Harrisburg, I am John Self.