Key Specialties Roundtable: What’s in Store for Service Lines and … · 2014-10-20 · healthcare and The Cheesecake Factory restaurant chain. ... system executives as speakers

Hospital ReviewApril 2013 • Vol. 2013 No. 4

INSIDESupreme Court Sides With FTC in Phoebe Putney Case What the Decision Means for Future Hospital M&A p. 50

Transforming Healthcare A Conversation With Presence Health CEO Sandra Bruce & St. Joseph Health CEO Deborah Proctor p. 16

5 Things the Most Extraordinary Hospital CEOs Do p. 53

Strategic Physician Onboarding: 7 Tactics for Minimizing Losses on Employed Medical Practices p. 28

INDEXPhysician-Hospital Relationships p. 28

Executive Briefing: Value-Based & Accountable Care p. 32

Finance & Revenue Cycle p. 36

Executive Briefing: Partnership Opportunities to Meet Reform’s Demands p. 46

Transaction & Valuation Issues p. 50

Health Information Technology p. 52

Executive Briefing: Physician Engagement p. 55

Is Center of Excellence Investment the Silver Bullet Healthcare Has Been Looking For?By Sabrina Rodak

Healthcare leaders generally recognize that there is no “silver bul-let” to any of the challenges the industry presents today — aligning with physicians, improving quality while lowering costs and differ-entiating oneself in an increasingly competitive market. However,

Is Bigger Always Better? Exploring the Risks of Health System Mega-MergersBy Molly Gamble

One idea that has gained a significant amount of traction in the past few months is that of “Big Medicine.” Brigham and Women’s surgeon and writer Atul Gawande, MD, propelled the phrase in his New Yorker op-ed last summer, in which he drew analogies between American healthcare and The Cheesecake Factory restaurant chain.

“Big chains thrive because they provide goods and services of greater variety, better quality and lower cost than would otherwise be avail-able,” Dr. Gawande wrote in the piece. “Size is the key. It gives them buying power, lets them centralize common functions and allows them

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Key Specialties Roundtable: What’s in Store for Service Lines and Their Leaders in 2013? p. 20

9 Ingenious Ways to Cut Costs at Your HospitalBy Bob Herman

When it comes to the cost side of a hos-pital’s financial equation, there are two ru-dimentary routes executives can explore.

They can either find better ways to spend their money, or they can probe different areas of the hospital to see where costs and expenses can be trimmed.

Several creative cost-cutting techniques have been detailed over the years — curbing food waste by weight, switching from bot-tled soda to fountain drinks, properly sort-ing hazardous from non-hazardous waste and more. However, as hospitals continue to evolve, new opportunities to save money are poking their heads to the surface.

Here, several hospital leaders detail nine unique ways hospitals and health systems can cut costs to become a more finan-cially stable organization — and many of them involve newer, progressive and “green” measures.

1. Rework shipping strategies. A component of hospital finances that may

continued on page 36

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6 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035

April 2013 Vol. 2013 No. 4 www.BeckersHospitalReview.com

FEATuRES 7 Publisher’s Letter

16 Transforming Healthcare: A Conversation With Presence Health CEO Sandra Bruce & St. Joseph Health CEO Deborah Proctor

Service Line Leaders’ Roundtable

20 Key Specialties Roundtable: What’s in Store for Service Lines and Their Leaders in 2013?

Physician-Hospital Relationships

28 Strategic Physician Onboarding: 7 Tactics for Minimizing Losses on Employed Medical Practices

Executive Briefing: Value-Based & Accountable Care

32 Financial Modeling: Predictive Insight into Value-Based Care Success

34 28 Statistics on Providers and ACO Development

Finance & Revenue Cycle

38 Moody’s:Record$20BofNon-ProfitHealthcareDebtDowngradedin2012

39 Becker’s Hospital Review 4th Annual Meeting Brochure

Executive Briefing: Partnership Opportunities to Meet Reform’s Demands

46 BetterCare,GreaterValue:NewPartnershipOpportunitiesforHealthSystems,Insurersand Physician Practices

Transaction & Valuation Issues

50 Supreme Court Sides With FTC in Phoebe Putney Case

Health Information Technology

52 Only1.8%ofHospitalsArePaperlessWithaFullEMR

52 Report:MoreThanHalfofDataBreachesSince2009ResultedFromTheft,Loss

52 Cerner,EpicRateHighestinICD-10Preparedness,AccordingtoProviders

53 5 Things the Most Extraordinary Hospital CEOs Do

Executive Briefing: Physician Engagement

55 6 Tips to Engage, Retain and Recruit Physicians

58 Physician Engagement: 20 Survey Findings

60 Chuck Lauer: Trust

61 Incentivizing Physicians for Quality Through Data, Compensation and Cultural Redefinition

62 Hospital & Health System Transactions

63 Hospital & Health System Executive Moves

63 Advertising Index

Hospital Review

EDITORIALLindsey DunnEditor in Chief

800-417-2035 / [email protected]

Laura MillerEditor in Chief, Becker’s ASC Review & Becker’s Spine Review


Molly GambleEditor


Bob Herman Editor


Heather Linder Assistant Editor


Jim McLaughlin Writer/Reporter


Carrie PallardyWriter/Reporter


Heather PunkeAssistant Editor


Sabrina RodakAssociate Editor


Anuja VaidyaWriter/Reporter


SALES & PuBLISHIngJessica Cole

President & CEO800-417-2035 / Cell: 312-505-9387 /

[email protected]

Ally JungDirector of Sales

800-417-2035 / Cell: 513-703-6515 / [email protected]

Lauren Groeper Assistant Account Manager


Heidi Harmon Assistant Account Manager


Maggie Wrona Assistant Account Manager


Cathy BrettConference Manager


Katie AtwoodDirector of Operations/Client Relations


Scott BeckerPublisher


Becker’s Hospital Review is published by ASC Commu-nications.Allrightsreserved.Reproductioninwholeorinpartofthecontentswithouttheexpresswrittenpermis-sion is prohibited. For reprint or subscription requests, please contact (800) 417-2035 or e-mail [email protected].

For information regarding Becker’s ASC Review, Becker’s Hospital Review or Becker’s Orthopedic & Spine Review, please call (800) 417-2035. @hospreviewmag Becker’s Hospital Review

7Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035

April issue. The April issue of Becker’s Hospital Review includes several sto-ries on centers of excellence and specialty service line development for hos-pitals and health systems.

The issue also features “9 Ingenious Ways to Cut Costs at Your Hospital” by Bob Herman and “Is Bigger Always Better? Exploring the Risks of Health System Mega-Mergers” by Molly Gamble, as well as content on hospital-physician relationships and accountable care organizations, hos-pital finance, and hospital and health system transaction considerations.

Supporting local hospitals. I am pleased to share that Becker’s Healthcare recently donated nearly $13,000 to the Ann & Robert H. Lurie Children’s Hospital of Chicago, as part of its charitable giving program.

The hospital, formerly Children’s Memorial Hospital, moved to its new $915 million facility in Chicago’s Streeterville neighborhood last summer. Becker’s donation coincided with Lurie Children’s annual fundraiser, Chi-cago Dance Marathon. The 2013 Dance Marathon event took place March 2, 2013, at the Renaissance Chicago Hotel, and Becker’s employees partici-pated and volunteered at the event, some dancing for 13.1 hours as part of their efforts to raise funds for care and research at the hospital, one of the leading children’s healthcare facilities in the nation.

4th Annual Becker’s Hospital Review Meeting. The 4th Annual Becker’s Hospital Review Meeting will take place on May 9-11, 2013, in Chi-cago at the Westin Michigan Avenue Hotel. The event will feature 85 health system executives as speakers. Keynote speakers include Lou Holtz, former college football coach, sportscaster and author, and Patrick Lencioni, found-er and president of The Table Group and author of 10 best-selling books

including “The Five Dysfunctions of a Team.” Bret Baier of Fox News’ “Special Report with Bret Baier” will also headline the event, serving as moderator for the meeting’s keynote panels. To learn more, visit www.beckershospitalre-view.com/4th-annual-beckers-hospital-review-meeting.html. To register, call (800) 417-2035 or email [email protected].

11th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference. The 11th Annual Orthopedic, Spine and Pain Man-agement-Driven ASC Conference will take place on June 13-15, 2013, in Chicago at the Westin Michigan Avenue Hotel. More than 100 sessions will feature more than 130 speakers on increasing ambulatory surgery center profits and improving operations of orthopedic, spine and pain-management practices and centers. Keynote speakers include basketball coach Mike Krzyzewski and Geoff Colvin, senior editor-at-large, Fortune Magazine, and author of “Talent is Overrated.” Legendary tennis coach Brad Gilbert and journalist Forrest Sawyer will lead keynote panels. To learn more, visit http://www.regonline.com/11thorthopedicspineASC. To reg-ister, call (800) 417-2035 or email [email protected].

Should you have any questions or if I can be of help in any manner, please do not hesitate to contact me at [email protected]. I can also be reached at (800) 417-2035.

Very truly yours,

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to adopt and diffuse innovations faster than they could if they were a bunch of small, indepen-dent operations.”

As it turns out, an analogy between hospitals and cheesecake eateries isn’t too far-fetched: America’s hospitals are moving steadily toward conglomeration. Data by Irving Levin & Asso-ciates shows that 2011, the latest year available, brought 86 hospital merger or acquisition deals — the highest number in the past decade.

And there are more colossal deals under way for 2013 and beyond. Last fall, Detroit-based Henry Ford Health System and Beaumont Health Sys-tem in Royal Oak, Mich., announced their sign-ing of a letter of intent to begin merger discus-sions. If they do consolidate, the systems would form the largest health network in southeast Michigan, with more than 42,000 employees and roughly $6.4 billion in annual revenue.

In Texas, Temple-based Scott & White Health-care and Dallas-based Baylor Health Care Sys-tem announced plans in December 2012 to merge into a 42-hospital, $7.7 billion organiza-tion with approximately 34,000 employees. The deal would drive the newly created organization to one of the top 10 largest non-profit systems in the country.

There’s also the pending merger between Livo-nia, Mich.-based Trinity Health and Newtown Square, Pa.-based Catholic Health East, which will create an 82-hospital system across 21 states — potentially the fifth-largest hospital system in the country.

These transactions can result in improved qual-ity, more seamless care coordination and in-creased access to capital. But Big Medicine and mega-mergers involve an entirely new set of or-ganizational challenges, too.

Mergers can face shaky odds for successMinoo Javanmardian, vice president of Booz & Company’s global health practice in Chicago, says merging is not a strategy. Rather, “mergers are the result of a strategy that [organizations] define and are meant to leverage the differentiat-ing capability systems of the partners,” she says. If a system identifies a set of capabilities they do not possess, merging is one way to bridge capability gaps or further leverage the existing capabilities in an expanded market. But health systems may put the cart before the horse, es-pecially when pursuing horizontal M&A defen-sively or as an expansion strategy.

System mergers, often justified for their econo-mies of scale, still carry a certain air of risk. An early 2013 study from Booz & Co. found only 41

percent of all hospital and health system merg-ers between 1998 and 2008 to be financially suc-cessful by outperforming their peer group. The study analyzed health systems’ financial perfor-mance two years prior to the merger and two years after the deal. More disturbing was the fact that almost one in five acquired hospitals went from a positive margin prior to acquisition to a negative margin after acquisition.

“When you look at this, it says, ‘Here is the evi-dence that the traditional levers of mergers and acquisitions, such as geographic expansion or in-creasing the number of hospital beds, are not in-dicative of a successful merger,’” says Ms. Javan-mardian. “Any merger is fraught with risk. If the real reason for a merger is to improve position in marketplace, then you need to be very thought-ful of how you integrate [and] how you preserve differentiated capabilities on both sides.”

More frequently, financially robust systems are merging to create networks that span through-out states or regions, such as the aforementioned pending transactions. Many of those systems are well-regarded and have national reputations for certain specialties. These types of marriages are different deals from those of struggling com-munity hospitals for access to capital or mere survival. Instead, these mega-mergers resemble a land grab.

“We think you’ll see more mergers happening not necessarily from hospitals and health sys-tems in distress,” says Ms. Javanmardian. “A lot of healthy systems are trying to figure out how to position themselves to be successful, given the pressures on the financial side of the market. To us, what drives that merger is very important. So far, most have happened based on traditional levers. We don’t believe that’s necessarily trans-lated to better performance.”

Paul Levy, former president and CEO of Beth Israel Deaconess Medical Center in Boston and healthcare author, agrees that there is an inher-ent risk to organizational expansions across the board.

“Think about firms in general that have grown over time by mergers, in all kinds of fields — banking and airlines, as well as hospitals,” says Mr. Levy. “They start as sensible business propositions, but some don’t work out very well because of cultural differences among [their] various parts, or lack of experience or expertise on part of the CEO as to how to run a system versus an individual entity. It’s almost a truism that as organizations grow, have more tentacles and cover more geography, it raises a whole new set of challenges for managers.”

The power of cloutAnother traditional benefit to consolidation? Getting a leg-up on a commercial insurers’ rates. “To the extent [systems] become a monopoly

in their service territory and are able to hold it over the payors, [systems] have less incentive to be efficient because they have market power,” says Mr. Levy. “That’s what has happened in the Boston area with Partners HealthCare. It’s such a dominant system that they can extract higher rates from payors and don’t feel the same cost pressures as other hospitals.”

Although merged health systems have been ac-customed to increased bargaining power with payors, Ms. Javanmardian says this may be on the decline, largely due to pressures from the Patient Protection and Affordable Care Act. “Going forward, there will be less money to go around. There’s not another option,” she says.

In the past, providers essentially viewed com-mercial reimbursements as subsidies to ease the hit from government health programs’ less robust reimbursement. But now, private payors face their own pressures, and providers may not be able to rely on commercial rates as much as they previously did. “[Providers] won’t be able to do that,” says Ms. Javanmardian. “You can merge, but if you think you’ll merge and increase your revenue per patient, I don’t think that’s a realistic expectation.”

What might happen if one of these large mega-merged systems does fail? A single community hospital falling onto hard times and ultimately failing is one thing. But the failure of a statewide or regional system poses even more pressing, albeit ambiguous questions. In attempts to explain what might happen if a mega-merged system does fall into bankruptcy or other distress, sources featured in this article largely lacked a common answer.

First, it’s important to start by defining the vari-ous ways a health system can fail. Bankruptcy is the most comprehensive scenario, but a system could fail if, post-merger, it must sell off indi-vidual hospitals it acquired. Another form of failure is shutting down unprofitable hospitals or facing legal and regulatory setbacks, which are a token risk for any large corporation. In general, the larger a system gets, the more legal and regu-latory risk it faces.

In 2008, the government came to the rescue for banks, largely to protect consumers from finan-cial distress. But is there an analogous agency or rescuer in American healthcare?

“The FDIC is the designated agency to take over for a failing bank. If you have a healthcare organi-zation that is too big to fail, and it fails, who comes in?” says Casey Nolan, managing director at Navi-gant Health in Washington, D.C., and leader of the firm’s healthcare strategic planning practice.

At this point, it’s speculation. But as systems ex-pand beyond their local status into statewide or

Is Bigger Always Better? Exploring the Risks of Health System Mega-Mergers (continued from page 1)

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regional networks, it’s difficult to say what might happen if a merger eventually leads to their sys-tematic collapse. After all, many experts are con-vinced the merger is pursued to avoid just that.

It’s not always a matter of size, but also importance Generally, the larger a health system, the less likely it is to fail. “The size of the parent compa-ny makes the risk of failure lower,” says Jordan Shields from Chicago-based Juniper Advisory, an independent investment banking firm exclu-sively focused on hospital mergers and acqui-sitions. “It is a bad outcome if a community’s hospital fails. Small hospital companies have a higher risk of failing than large systems. That’s one of the reasons the credit rating agencies place emphasis on business scale.”

In that sense, the concept of “too big to fail” may hold true for large, integrated systems — their size will reduce their risk. But this is still different from the traditional meaning of the phrase, which really came to life after the bank-ing collapse and bailouts in 2008. In healthcare, especially in urban markets, the phrase can also go another way. “The safety-net [hospital] isn’t too big to fail — it’s too important to fail,” says Mr. Nolan of Navigant Health.

In urban markets, safety-net hospitals or health systems are essential to the community. Detroit Medical Center, Caritas Christi Health Care in Boston and West Penn Allegheny Health System in Pittsburgh are three examples of systems that are, or were, pillars of non-profit healthcare in their respective urban communities.

But within the past four years, all three systems underwent or are in the process of unortho-dox transactions. For-profit Vanguard Health

Systems, based in Nashville, Tenn., purchased DMC in November 2010. Boston-based Stew-ard Health Care System, a new affiliate of pri-vate equity firm Cerberus Capital Management, purchased the Catholic Caritas Christi in March 2010. And Pittsburgh-based health insurer High-mark was working to buy West Penn Allegheny at the time this article went to print.

Studies suggest only hospitals that are financially viable and essential to the market need to be saved. As for the examples mentioned above, DMC employs approximately 12,000 people. Caritas Christi was the 10th largest employer in Massachusetts with more than 13,000 employ-ees, and West Penn employs roughly the same number. These organizations were also critical in their markets for the volume of charity care they delivered in underserved areas. DMC was, for instance, the largest charity care provider in the state of Michigan.

“Local governments are going to view some hospital systems as too big to fail, and they won’t allow a hospital to just go by the wayside,” says Rex Burgdorfer with Juniper Advisory. “As a re-sult, they’ll be more amenable to concessions on the transaction terms for a company to come in and save the hospital.”

The larger the system, the more pressure to find the right CEO The boards of integrated health systems may fall prey to a search for perfection when looking for the best CEO candidate to lead their multifac-eted organization. For example, if a system in-cludes hospitals, a health plan, a physician group and a home care setting, that board may want a CEO who has touched all service lines and

is equipped with prior leadership experience at each part of the system. This is faulty thinking, says Kimberly A. Smith, partner and managing director of executive search firm Witt/Kieffer’s Eastern region in Burlington, Mass.

“Surely those people are in extraordinarily short supply,” she says. Instead, boards should ensure their requirements for an incoming CEO are divided between technical skills and leadership abilities. If these requisites are disproportion-ately sought, with more focus on one or the other, the executive search can quickly become arduous.

“There’s a moment when the governing group steps back and says, ‘What are we really look-ing for in the defined future, in the next three to five years?’ And that refocuses governance on exactly what core leadership competencies are needed; not so much the technical competen-cies,” says Ms. Smith. “There’s a real difference between the two.”

It’s also critical for governing bodies to remem-ber the distinct roles of the health system CEO and COO. For the latter, prior experience or spe-cific expertise with each sub-entity of a system is more crucial.

“[The COO] is the person charged with deliver-ing an end product and making sure the piec-es of the organization come along,” says Ms. Smith. “But the CEO is a much more strategic role. I think it’s increasingly important for orga-nizations to recognize that the vision and capac-ity to develop followership and get all entities on board with a common direction — that’s the skill set you’re looking for. Not so much whether the CEO has run a home health agency.” n

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there are some strategies that resemble the proverbial silver bullet more than others — strategies that, while not solving every problem in one go, make significant progress on a wide range of issues. One such strategy (a silver-plated bullet, if you will) that plays a central role in many healthcare organizations’ strategic plans is investment in centers of excellence.

Developing centers of excellence can provide a platform for hospitals and health systems to align physicians in quality improvement, reduce costs through greater efficiencies and create market differentiation through clini-cal excellence and high patient satisfaction.

Target 1: Enhanced qualityAs the name suggests, centers of excellence are primarily designed to deliver high-quality care consistently. Developing standardized, evi-dence-based care processes that ensure high-quality outcomes not only sets the foundation of a center of excellence, but also helps hospi-tals reach quality standards that are included in federal reimbursement models such as value-based purchasing and bundled payments. Thus, investing in a center of excellence enables hospitals to differentiate themselves through top-tier care and gain cost savings under new pay-ment models.

“Right now, there is so much pressure on the cost side that sometimes quality takes a backseat,” says Steve Moreau, president and CEO of St. Joseph Hospital in Orange, Calif. “But that is not going to be sustaining. That’s why focusing on excellence is such an important effort. We can’t take our eye off quality by focusing exclusively on cost reduction.” Mr.

Moreau says a key aspect of centers of excellence is their consistency, re-liability and minimal variation. Reducing variation can improve outcomes as well as patient satisfaction, another aspect of healthcare quality.

Patient satisfaction“The more we become responsible in every aspect of care, the better pa-tients seem to feel about [the hospital],” says Marc Sakwa, MD, chief of cardiovascular surgery at Beaumont Hospital, Royal Oak (Mich.) and chair of Beaumont Health System’s Heart and Vascular Center of Excellence, which was created about three years ago. “Patients are aware that their wait times are less, that the nurse is there to answer their call buttons quicker. We measure patient satisfaction on a regular basis; it’s only gone up since we started doing these centers of excellence.” Patients with better experi-ences are more likely to return to the hospital, generating greater revenue and a stronger reputation for the hospital.

Target 2: Physician alignmentPhysician alignment is both a necessity and a consequence of developing centers of excellence.

Physician alignment as necessityTo create standard protocols that will increase quality, physicians’ and hos-pitals’ incentives should be aligned. Incentivizing physicians for low varia-tion, high patient satisfaction and overall high quality can ensure everyone works collaboratively to meet the goals of a center of excellence.

For example, Sacred Heart Hospital in Eau Claire, Wis., aligned with physi-cians for its robotic surgery center of excellence. By giving physicians a leadership role on a robotic surgery committee, the hospital and physicians reached alignment on goals and approaches to quality care. “What brought

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Is Center of Excellence Investment the Silver Bullet Healthcare Has Been Looking For? (continued from page 1)

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our success so far is our active robotics committee. We have representation from administration, surgery and technicians,” says Pat LuCore, RN, MHA, assistant administrator of the hospital.

Physician alignment as consequenceEstablishing a vision for a center of excellence can also facilitate physi-cian alignment with administrators because they have a shared goal of high quality. Dr. Sakwa says center of excellence development can also align physicians with other clinicians and staff. “The concept of a center of ex-cellence is to work together with staff to come up with ways to improve,” he says. “As doctors, we found that nurses were hungry for more commu-nication. They wanted to come on rounds with us; they wanted to improve quality. They respected the fact that we were taking an interest in it, and realized that together we would be able to make dramatic changes.”

Pursuing center of excellence development as a strategy can thus create a platform for aligning physicians and creating a stronger level of integration of physicians in the hospital.

Target 3: Attract physiciansBesides aligning with physicians who are currently partnered with the hospital, centers of excellence can also attract physicians to a hospital. “What attracts doctors is they want the best tools to treat patients. If better technology results in better patient outcomes, they’re going to go to the organizations that have the best technology,” Mr. Moreau says. Sacred Heart Hospital’s development of a center of excellence around the da Vinci robot helped recruit physicians to the hospital. “It helped at-tract new physicians that are very skilled, focused and interested in this,” says Faye L. Deich, RN, MS, NEA-BC, senior vice president of division operations and COO of Sacred Heart Hospital. “Some physicians would not have come to our community if the robot was not available for them to use because they trained on it.”

Target 4: Setting industry standardsIn addition to improving quality within the center of excellence itself, standardizing evidence-based practices can improve quality within an entire health system and in health systems across the country. “Once we develop different ways to improve care, we go back to other physicians within the system — other cardiologists or referring physicians — and show them how we improved; by improving, it also helps them,” says Dr. Sakwa.

Similarly, best practices developed at a center of excellence can be shared with other health systems so everyone can benefit from processes proven to be successful in improving quality and lowering costs. “The fact that centers of excellence have contributed to improving quality and develop-

ing evidence-based practices that others can see has impacted care and the standard of excellence across the country,” Mr. Moreau of St. Joseph Hospital says.

Moreover, the ability of centers of excellence to set industry standards and examples of best practices helps create a reputation of innovation, leadership and quality at the hospital. “When your organization is success-ful and has demonstrated practices leading to better outcomes, you get greater visibility,” Mr. Moreau says. “You begin to get regional or national visibility because you’re asked to write papers or make presentations across the country, which then become national best practices.” For example, St. Joseph is asked by Premier, a healthcare resource organization, to make presentations several times a year to share best practices with the national healthcare community, according to Mr. Moreau.

Investing in centers of excellence as part of a hospital’s overall strategy can pay significant dividends in elevating the organization’s brand and reputa-tion to a national level. “As we improve even more, the entire hospital brand improves,” Dr. Sakwa says. “In [the heart and vascular] area, Beau-mont’s brand had already been very strong; over the last three years, it’s only gotten stronger and more visible.”

Target 5: Market differentiationBy standardizing best practices and aligning physicians and staff to im-prove quality, centers of excellence differentiate hospitals from their competitors. Centers of excellence can become destination sites for pa-tients by guaranteeing a level of value that similar organizations do not offer — at least not as conveniently. “One of our strategies is how to differentiate ourselves in a market that has very strong, high-quality pro-viders,” Ms. Deich says. “Our strategy is [looking at] where we can do very well and developing specialty services locally so people don’t have to be referred outside. It’s the direct opposite of what has been the strategy of our competitor.” By offering robotic surgery in several specialty areas, Sacred Heart Hospital has set itself apart from other providers that do not have this service.

St. Joseph Hospital has created differentiation in two areas of cancer care — outreach to the underserved population and services. St. Joseph Hos-pital received funding from the National Cancer Institute to develop its cancer program for the underserved. “That’s an example of a differentia-tion that gives us a lot of visibility regionally and to an extent nationally,” Mr. Moreau says.

Center of excellence development as part of a strategic plan can help set hospitals apart through quality and unique offerings, which can give hospi-tals the edge they need to win out over competitors.

Target 6: Cost savingsCenters of excellence provide an avenue for cost reduction through stan-dardization and quality improvement. As mentioned earlier, meeting qual-ity metrics is necessary to share savings in models like bundled payments and value-based purchasing. By creating standard protocols, healthcare teams can more consistently meet quality targets and improve care effi-ciency, which creates cost savings that can then be reinvested in quality and patient experience, according to Dr. Sakwa. “Having a well organized center of excellence is one of [Beaumont’s] key strategies. It helps us not only improve research and quality, but also financial performance; it aligns our physicians and makes sure we’re on the same strategy page as our ad-ministration,” he says.

Center of excellence investment as key strategyBy investing in centers of excellence, hospitals and health systems can improve quality, which can help align and attract physicians as well as create market differentiation. Standardizing evidence-based practices and eliminating wasteful processes can position hospitals for success as reimbursement models take into account quality and patients seek top-tier care. n1-800-932-7472 w w w.imageerst.com

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Transforming Healthcare: A Conversation With Presence Health CEO Sandra Bruce & St. Joseph Health CEO Deborah Proctor By Sabrina Rodak

Strong leadership is essential for any successful organization. In healthcare, this principle is perhaps amplified because of the chal-lenging environment that currently surrounds hospitals and health

systems. Hospital and health system leaders often run into similar barriers, but rarely do they get an opportunity to share their strategies for overcom-ing these challenges and discuss ideas for moving forward.

To provide an opportunity for health system CEOs to share successes and frustrations, Becker’s Hospital Review facilitated a conversation between San-dra Bruce, president and CEO of Chicago-based Presence Health, and Deborah Proctor, president and CEO of Orange, Calif.-based St. Joseph Health. Below are Ms. Proctor’s questions, Ms. Bruce’s responses and Ms. Proctor’s follow-up responses.

Deborah Proctor: How do we partner with other healthcare pro-viders in this new environment? What skills do you draw on?

Sandra Bruce: Establishing solid partnerships with other providers in this new environment is critical, and we are doing so in a variety of ways. For example, we may partner with other hospitals in our supply chain ef-forts to help reduce supply costs further, or we may seek other partners to become part of our clinical integration model.

Partnering and aligning with physicians has always been important, but in the new era of hospital-physician alignment, it is essential. The emergence of new care models such as clinical integration and accountable care orga-nizations depends on strong partnerships as payment moves to a lump fee that is allocated across the ACO. As managed care payments move from fee-for-service to value-based care, there are also payment incentives that are tied to clinical outcomes such as preventable hospital readmissions.

We also continue to look for participants to become part of our clinical in-tegration entity — Presence Health Partners. Clinical integration is a mean-ingful provider alignment vehicle to retain high-caliber physicians while attracting new independent physicians, especially primary care. The model provides an alternative to employment and offers physician participants a robust resource of technology, care management, reporting and analytics capabilities that will be necessary for physicians to meet the new demands of accountable care and population health management.

And, finally, there is a need for us to partner with our community. Popula-tion health management is focused on improving the health of our com-munities by focusing on better chronic disease management and preventive care. This new environment requires hospitals and health systems to reach beyond the brick and mortar of our facilities and work to empower pa-tients with the tools to help them stay well.

The skills essential to the success of these partnerships are collaboration and negotiation. Healthcare has lived in silos for many years, but this new emerging healthcare environment requires us to develop and strengthen relationships among healthcare providers, payors and physician partners.

DP: I couldn’t agree more that partnerships are going to shape our future. Similar to Presence, we are seeking stronger partnerships with our physicians. Our efforts in clinical integration have intensified over the past several years not just out of the necessity to align with reform, but because we under-stand that patients are most interested in seamless, less fragmented health-

care. They want systems that talk to one another and care that flows easily from the hospital to doctors’ offices to other health-care resources within their communities.

Over the next several years, our intent is to develop a true network of healthcare that includes acute-care hospitals, physi-cians, home health, skilled nursing and other healthcare providers. This will be a network based on partnerships, not always ownerships. We’re going to have to learn to be better members of highly coordinated healthcare teams.

Additionally, we have already realized the potential of developing never-before imagined partnerships. Our planned af-filiation with Hoag Hospital in Southern California is a good example of such an opportunity. After several decades, we began to recognize the benefits of the two health systems becoming potential affiliates. When we announced our plans last August, people in our communities were extremely positive. Many have told me they are excited about the prospects of two outstanding providers finally coming together for the good of the community. That’s a much different way of operating, but it bodes well for the new environment.

DP: What three qualities must a healthcare system leader have?

SB: First, a healthcare system leader must have the ability to manage in a fast-paced, ambiguous environment. At times, the end point may not be clear, and the path to get there may be undefined as well. This ever-evolv-ing environment requires leaders to be flexible and collaborative.

Second, a health system leader must have the ability to create a manage-ment structure that is both top-down and bottom-up. By this I mean it must be both hierarchical and collaborative in order to maximize cross-functionality to work efficiently and effectively.

Third, a healthcare system leader must have the ability to embrace evi-dence-based decision making from both a clinical standpoint and a business perspective. This requires a culture shift from basing decisions on what we think to basing decisions more on data and what we know. DP: Personally, I’ve been inspired by contemporary theologian Gerald Ar-buckle who writes about the need for “prophetic leaders” who understand mission and can imaginatively and collaboratively ensure it endures in these transformative times. That’s not an easy task, and I remind myself daily of the qualities that Arbuckle outlines for a “prophetic leader:” memory of the great traditions, creativity, orientation toward the community, steadfast-ness in commitment, patience in adversity, humility, a sense of humor and

Sandra Bruce

Deborah Proctor

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the ability to recognize what people lose during a time of rapid change. Okay, that’s more than three qualities. However, these are awesome charac-teristics for a leader, especially in a faith-based organization like ours. These qualities encapsulate that great balance we must achieve between honoring our traditions and working with others to shape a positive future.

DP: Realistically, how do we transform when faced with such drastic cuts in reimbursement?

SB: There are no other options for healthcare systems except to transform the care delivery model. We need to establish greater innovation around patient, resident and family-centered care. We must operate with greater efficiency with even higher standards for quality and safety. Physician align-ment and accountability for the health and wellness of our communities are essential. U.S. healthcare must reduce the cost to growth rate to no more than the nation’s gross domestic product. Estimates now show that healthcare spending could reach 20 percent of the U.S. economy by 2021.

DP: Sandra is absolutely right. We don’t have other options except change. As healthcare providers, our focus must be on quality and value. Two years ago, our organization developed an initiative called The Value Imperative, which calls upon our key functional areas to identify those activities that can be performed more efficiently and, in doing so, provide greater value to those we serve. When we started, there were those who said pursuing efficiency, quality and value would require trade-offs. Yet, our teams have proven just the opposite. Working together, they have found innovative ways to transform healthcare so that we spend less and increase the value of services we provide.

DP: How much time do you spend driving cultural change?

SB: A significant portion of my time is focused on driving cultural change, and that will continue for the next several years, particularly as we con-tinue to create this new organization in an industry that is essentially being turned upside down. To succeed in this new environment, attributes of the new culture will need to be focused on continual performance improve-ment, data driven decision-making and moving to a model of care that is more patient-centric rather than business-centric.

DP: I spend the majority of my time focused on nurturing our culture, as well as nurturing the next leaders of our organization who will be part of the great changes underway. We are fortunate to have a strong culture at St. Joseph Health which is steeped in the values and traditions of the Sisters of St. Joseph of Orange. However, even a strong culture must evolve with the times, and that’s where leadership becomes extremely important. My challenge is to transform this rich and values-based culture so that we can maintain our basic principles and still address the needs of the new envi-ronment. Similar to Sandra, we are focused on performance improvement, physician engagement and a model that puts the patient — and the com-munities where they live — at the core of our efforts. To drive such change, I am well aware that we must be intentional, respectful and foresighted — not always an easy combination, but a way of moving forward that I expect from myself and my leadership team.

In closing, I want to thank Sandra for not only having this conversation, but for being a great colleague and remarkable leader in healthcare. Thanks, too, to Becker’s for facilitating this dialogue. How wonderful that we can learn from one another in these types of discussions. n

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Key Specialties Roundtable: What’s in Store for Service Lines and Their Leaders in 2013?By Anuja Vaidya

As the demand for specialized care in-creases, hospitals have to transform and innovate the care offered by their ser-

vice lines to meet this demand. Each service line is unique, and the development of each differs. But, service line leaders are confident that with engaged physicians, creative solutions and care coordination, service lines can increase patient satisfaction and quality of care.

In this article, several service line leaders from top programs across the country discuss the op-portunities in and challenges facing the oncology, cardiovascular, neurology and orthopedic service lines in the coming year. They also talk about the latest technologies being used in their service lines and offer advice to service line leaders.

Cardiology and CardiovascularQuestion: What are some of the big-gest developments or opportunities for growth in the cardiovascular service line in the coming year?

Jennifer Bringardner, Vice President, national Cardiovascular Service Line, Catholic Health Initiatives (Englewood, Colo.): The cardiovascular service line is un-dergoing significant change. It is expanding from primarily a focus on episodic care to popu-lation health. That is, caring for the consumer across the continuum. Primary prevention will be a major area of focus.

New models of care delivery will shift care from hospitals, historically the center of the health-care continuum, to less expensive and more appropriate settings. As we form our clinically integrated networks, the role of the cardiovascu-

lar specialist will evolve and develop to support these new delivery models.

Tom Stys, MD, Medical Director of Cardi-ology, Sanford Health (Sioux Falls, S.D.): It is certainly a dynamic and fast-evolving world. The general trend is to provide care to patients in a less invasive manner, which also allows for expand-ing care to patients who are cannot undergo inva-sive procedures due to age. For example, minimally invasive valve replacement can be used for patients who are not candidates for open-heart surgery.

Q: What are some of the newest tech-nologies or applications that are being used in the cardiovascular service line?

Greg Schwarz, Vice President of Busi-ness Development, St. Vincent Medical Center (Los Angeles): We have placed im-portance on diagnostic procedures and testing be-cause this sets the course for the patient’s cardiac care. We have spent a lot of money on improving the diagnostic equipment at the hospital. Addi-tionally, we have placed greater emphasis on less invasive procedures as technology advances.

Paul Colavita, MD, President, Sanger Heart & Vascular Institute, Carolinas HealthCare System (Charlotte, n.C.): We now use telemonitoring. We have an im-plantable device that monitors blood pressure in congenital heart patients. The data from the device is sent to a large remote diagnostic clinic and to the patient through their cell phone. This helps us make recommendations to the patient regarding medication and diet.

Q: What are some of the challenges currently facing the cardiovascular ser-vice line?

Mr. Schwarz: The challenge today, in South-ern California, is that the physician community is fragmented. Physicians and hospitals will need to become more organized and create centers of excellence. This will allow for comprehensive heart care to be delivered under one roof with increased efficiencies, better patient outcomes and lower costs.

Dr. Colavita: A lot of the challenges have to do with increasing the size of the care team. In the past, physicians felt as though they were pretty much in charge of the patient’s care. It was an individual physician-patient relation-ship. Now, we are creating partnerships with advanced care practitioners, primary care phy-sicians and also pharmacists, social workers and dieticians.

Q: How would you recommend over-coming some of the challenges facing the cardiovascular service line?

Jennifer Bringardner Tom Stys, MD

greg Schwarz

Paul Colavita, MD

22 Service Line Leaders’ Roundtable22

Dr. Colavita: One attempt to overcome chal-lenges is to create a community — a community of providers. If someone has heart failure, we should try and ensure that their care is uniform, whether they go to a primary care physician or a specialist or come to the hospital. The care should be similar and evidence-based.

Ms. Bringardner: Recognizing that we are evolving, we are challenged to be patient as our teams learn new skill sets. A stronger emphasis on sharing best practices so time is not wasted on initiatives, which ultimately, will not add val-ue, is needed.

Leveraging the talent of our team members to design innovative, streamlined approaches to transform the way we provide care is essential. Strong data systems and analytics are founda-tional elements.

Q: What advice do you have for service line leaders for the coming year?

Dr. Colavita: My advice for them is to listen to all the members of their team and formulate plans with input from all those members.

Dr. Stys: My advice would be to definitely stay on top of the newest and latest developments. This is a very rapidly developing field. Also, they should try to secure interdisciplinary collabora-tion at the institution. We have to work as a team rather than as individual care providers.

Neurology Q: What are some of the biggest develop-ments or opportunities for growth in the neurology service line in the coming year?

Debbie Spielman, Assistant Vice Presi-dent, Florida Hospital neuroscience In-stitute (Orlando): For us particularly, the big-gest development will be the expansion of our pediatric epilepsy program into an adult program. This program is designed for patients who are not responding to medication for their seizures and in-cludes very comprehensive, integrated, diagnostic technology including a PET/EEG, fMRI, MEG and cEEG to determine if a surgical approach is indicated. Along similar lines, we have also invested

in our neurodiagnostic infrastructure by including continuous EEG technology in our 40-bed neuro critical care unit. This allows us to detect sub-clini-cal seizure activity in our neuro critical care patients.

Kim Springer, MSW, Executive Director of St. Vincent Neuroscience Institute at St. Vincent Indianapolis Hospital: Within neuroscience, as is true with all service lines, the most pronounced opportunity lies in responding to our changing healthcare environment. At St. Vincent, we specifically recognize the opportu-nity to strengthen physician alignment strategies to better respond to changing patient popula-tions, physician availability, reimbursement mod-els and technological advances. Programmati-cally, this year will provide the opportunity to enhance our stroke system of care through the development of a statewide telestroke strategy. We will also see growth in the areas of epilepsy/seizure, spine care, neurovascular surgery and neuro-oncology, as well as trauma services and pediatric support.

Q: What are some of the newest tech-nologies or applications that are being used in the neurology service line?

Ms. Spielman: Continuous EEG is one new technology which we have integrated with other neuro monitoring for better care of our most criti-cal patients. We are also investigating the NeuroB-late, which is a minimally invasive laser approach to inoperable brain tumors and lesions. It utilizes our intra-operative MRI technology for guidance. For our brain attack program, we are using the Solitaire and the Trevo, both of which are clot retrieval de-vices utilized in interventional neuroradiology for stroke patients beyond the window for tPA.

David Houghton, MD, MPH, Vice Chair-man of Clinical Development and Divi-sion Chief of Movement and Memory Dis-orders, Ochsner neuroscience Institute (new Orleans): Teleneurology and that remote ability to manage patients is number one on the list. We are well-established in its application for stroke, and we are expanding it quickly to all aspects of neuroscience. We are also using more functional brain imaging, including DaTSCAN, which is a

technology that helps in the differential diagnosis of tremor disorders such as Parkinson’s disease.

Q: What are some of the challenges cur-rently facing the neurology service line?

David Charles, MD, CMO, Vanderbilt Neuroscience Institute at Vanderbilt university Medical Center (nashville, Tenn.): Payors are reluctant to pay for new technologies that are expensive. In neuro, we have a range of new technologies in different areas, but it is happening at a time when there is huge pressure to reduce healthcare costs.

Ms. Spielman: Probably standardization of care. That’s probably a real challenging one that we are going to have to start tackling as it relates to spine disorders as well as many other neuro-related conditions. The challenge within that is bringing our physicians together to be a part of this process and endorse standardization in the areas where the evidence supports it.

Dr. Houghton: The number one challenge, re-gionally and nationally, is the financial pressure being brought on by the reimbursement models of Medicare, Medicaid and the commercial in-surance companies.

Q: How would you recommend over-coming some of the challenges facing the neurology service line?

Debbie Spielman Kim Springer, MSW David Houghton, MD, MPH

David Charles, MD

24 Service Line Leaders’ Roundtable24

Ms. Springer: Engaging physician extenders as well as extending the reach of physicians through telehealth are two strategies that will help address the changing physician pool. With neurodiagnos-tics, “growing our own” quality technicians will help. As for changed reimbursement models, I believe that strong interdisciplinary teams, led by engaged physicians, will help us identify waste and operationalize smarter medical models focused on defined patient populations.


Ms. Spielman: Every organization is different with regard to where they are at on the journey, but I think we all have to focus on standardiza-tion in the acute-care setting as well as how we expand the continuum of care in the outpatient setting. We will ultimately be held accountable for patient outcomes, so we must begin to design care models that extend beyond the acute care walls.

Dr. Houghton: I think, at the end of the day, they should remember that exemplary patient care is the best model for success. It will drive patient volumes and lead to the best outcomes. And they should think creatively, particularly when fee structures and margins are shifting. We can think creatively, consolidate expertise, use technology like teleneurology and increase both efficiency and patient satisfaction.

OncologyQ: What are some of the biggest develop-ments or opportunities for growth in the oncology service line in the coming year?

Andrew Pecora, MD, Chief Innovations Officer and Vice President of Cancer Services, Hackensack (n.J.) university Medical Center: One of the biggest things is the development of at-risk contracting. That has the potential to be transformative. At-risk con-tracting is where the providers create a product rather than offer services that the payors pay for in a lump sum.

Sonya Greck, RN, Senior Vice President of Operations, Asheville, n.C.-based Mission Health: Here at Mission Health, our

focus is always on the patient. The organization and service lines continue to take care of our pa-tients and make decisions by something we call the BIG(GER) Aim. That means we strive to achieve the desired patient outcome first with-out harm, also without waste and with an excep-tional experience for the patient and the family.

In the cancer service line, one of the major op-portunities will be to continue to provide the best possible care with decreased reimburse-ment. Currently, we are participating in a variety of value stream mapping processes to determine how we can add value to the patient experience. This involves process improvement and elimi-nating waste so that our caregivers have more time to spend with the patients.

Our cancer program continues to grow with in-clusive services from genetics to end-of-life care. We are truly multidisciplinary and are constantly seeking ways to provide patients with access to care. This is demonstrated in our multidisci-plinary clinics where patients can come to one place, and our physicians and caregivers are in the clinic to provide care. That means that a pa-tient does not have to go from one office to an-other seeking care. A comprehensive approach is so important to our patients.

Another opportunity is the development of our electronic medical records in the ambulatory set-ting. The ability to document care and commu-nicate effectively to all caregivers is vital in the patient care setting.

Q: What are some of the newest tech-nologies or applications that are being used in the oncology service line?

Ms. greck: The continuous development of multidisciplinary clinics is one of the best op-tions to address a comprehensive treatment mo-dality for patients. We continue to see the ben-efits for our patients and continue to see great opportunity in developing these clinics. For example, partnerships between disciplines like nutrition, pulmonology, thoracic surgery, medi-cal oncology, psychosocial support and the ra-diation oncology team ensures that the patients have an extensive multidisciplinary treatment

plan and access to caregivers.

Electromagnetic Navigation Bronchoscopy is a technology that we have adapted to facilitate the diagnosis and treatment of our patients for lung treatment. Mission Hospital is the only hospital in western North Carolina that provides this new minimally invasive procedure. The process com-bines GPS-like technology with a catheter-based system — threaded through the patient’s natural airways — to access hard-to-reach regions deep in the lungs. The procedure can locate, test and diagnose disease thus helping physicians plan treatment and eliminating the need for invasive surgical procedures, such as needle biopsy.

Mission Cancer also offers a wealth of comple-mentary and holistic services to enhance recovery and help patients through healing with less pain, fewer medications, lower stress and better sleep. For example, Mission Cancer pairs each patient with a registered nurse who can help with both the medical and non-medical concerns they face after diagnosis. These nurse navigators support patients from the time of diagnosis, through treatment and into survivorship or end-of-life care.

Q: What are some of the challenges cur-rently facing the oncology service line?

Jack Khashou, Vice President, Ochsner Cancer Institute (new Orleans): We are re-ally facing two main challenges. Primarily, how do we expand the focus on the patient and provide them a more holistic approach to their care dur-ing treatment and continue to support them after treatment. The second is staying ahead of the cost pressures and changing reimbursement models. We are attacking this through our pursuit of value initiatives, which aims to provide the best treat-ment options at the best value. In our opinion, this will be accomplished by carefully assessing best practices and reducing treatment variation.

Deb Hood, Vice President, National On-cology Service Line, Catholic Health Ini-tiatives (Englewood, Colo.): Our biggest struggle in the past three years has been to obtain data — apples-to-apples comparisons instead of apples-to-pencils. In oncology, there are so many different systems and locations where information

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26 Service Line Leaders’ Roundtable

resides, such as laboratories, imaging centers and physician offices. Without good data, you can’t be-gin to have discussions about how to reduce costs or improve outcomes. We have spent many hours carefully detailing the exact description of an item we want to measure and exactly where the most valid data resides. Since most of oncology work is in the outpatient arena, this data, along with good comparative benchmarks, can be difficult to obtain.

A close second is physician alignment. Catholic Health Initiatives has very few employed on-cologists, so working with independent practices in each individual market has been a challenge with various quality initiatives we’d like to imple-ment. This work is much easier to do if you’re a Kaiser or another institution where everyone is employed and willingly sharing data or on the same software system.

The other challenge is figuring out the role of oncology in the various new models of care, such as ACOs, patient medical home, etc., that are developing. We’re looking at the specialty neighbor model for oncology and have a lot of work ahead for us in this development.

Q: How would you recommend over-coming some of the challenges facing the oncology service line?

Ms. Hood: In the past, I didn’t feel that your oncologists all needed to be employed. Today, however, I feel that we need something to link the oncologists and cancer centers in this new era of population health. Maybe that’s employ-ment, but it could also be professional or man-agement service agreements. Physicians are lin-ing up with various partners across the country, but some independent groups still want to wait and see what direction everything is headed. I’m not sure we can afford to wait for them. We have a lot of preparatory work that needs to be done now, and we need strong physician partners.

For the work ahead, we also need to be physician-led. Our service line is organized in clinical dyads. My partner, Dax Kurbegov, MD, is the physician vice president, and I am the administrative vice president. Dr. Kurbegov and other physician leaders throughout our system are doing a tre-

mendous amount of work that’s preparing us for the future. We need their clinical leadership and expertise embedded in everything we do.

OrthopedicsQ: What are some of the biggest devel-opments or opportunities for growth in the orthopedic service line in the com-ing year?

Dereesa Purtell Reid, COO, Hoag Ortho-pedic Institute (Irvine, Calif.): More than ever, hospitals and physicians must look for ways to align their goals around achieving the high-est quality while driving down the cost of care. With an aging U.S. population and an increase incidence in obesity, the demand for orthopedic care will continue to grow. Optimizing the health of patients before surgery is essential whether it is weight loss or addressing other co-morbidities.

Q: What are some of the newest tech-nologies or applications that are being used in the orthopedic service line?

Ms. Reid: While orthopedic and spine implants continue to improve, we are focused on evaluating surgical products that improve patient care and also reduce costs. Innovative orthopedic surgical techniques, such as the direct anterior approach for elective, primary hip replacement, are less in-vasive and decrease recovery time. For example, Hoag Orthopedic Institute reviewed several pa-tient-warming methods in the operating room. Keeping patients warm throughout surgery has been proven to reduce the risk of infection.

In the world of neurosciences, the technology continues to advance — deep brain stimulators, neurological drugs and new approaches to neu-rological rehabilitation.

Akram Boutros, MD, Founder and President of Business First Health-care Solutions, former COO and CMO at South nassau Communities Hospi-tal (Oceanside, n.Y.): The introduction of robotics. The RIO™ is a robotic platform de-signed to improve implant alignment and reduce surgeon error by passively restraining surgeon movement to ensure precision.

Q: What are some of the challenges currently facing the orthopedic service line?

Ms. Reid: Two key challenges come to mind for any service line, whether it is orthopedics, neu-roscience, heart or cancer. The first is that voca-tional commitment by physicians and the hospital is essential. Building a service line is a multiyear, perhaps multidecade commitment with many fi-nancial and organizational challenges. The most successful service lines were built by a core group of individuals that were internally motivated by a “calling” or vocational commitment to build a service line or institute that surpasses what any one individual or hospital can do alone. The sec-ond is that with limited resources and the need to produce top quality, not all programs and service lines may be feasible.

Q: How would you recommend over-coming some of the challenges facing the orthopedic service line?

Ms. Reid: Healthcare reform wills thoughtful consideration as to which service lines a specific hospital or health system can provide at the highest quality and reasonable costs. Value-based purchas-ing is creating quality transparency among hospi-tals and service lines. With limited resources and declining reimbursement, the portfolio of service lines offered by hospitals is likely to narrow.


Ms. Reid: Become best friends with nursing! Nurses provide care at the intersection of pa-tient satisfaction and quality. They are the heart of the healthcare organization — serving pa-tients and physicians.

Dr. Boutros: I would advise service line lead-ers to focus on service line transformation. While in the short-term, the focus on profitable growth is critical, in a highly competitive market, expansion of care beyond the operating room is important for long-term success. A full menu of options and packages from diagnosis to recovery should be aligned for effective delivery of high-value, personalized outcomes. n

Dereesa Purtell Reid Akram Boutros, MDDeb Hood

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28 Physician-Hospital Relationships

Strategic Physician Onboarding: 7 Tactics for Minimizing Losses on Employed Medical PracticesBy Sabrina Burnett, Vice President, and Cami Hawkins, Managing Associate, Health Directions

How much money do hospitals lose on employed physicians? Ac-cording to the New England Journal of Medicine, operating shortfalls range from $150,000 to $250,000 per provider during each of the

first three years of employment. But for many hospitals, these initial losses are just the tip of the iceberg.

Mistakes that occur early in the physician employment process can add to hospital costs while decreasing long-term revenue. For example, poor finan-cial modeling can mask future problems with practice expenses. Missteps in contracting and billing can reduce practice payments. Misaligned incentives can permanently suppress practice revenue. All told, these early mistakes can swell the total cost of physician employment. Hospitals that pursue even a modest employment strategy can easily lose several million dollars per year.

How can hospitals avoid excessive financial losses? The solution is to cre-ate a comprehensive physician onboarding process that proactively ad-dresses the main causes of high costs and low revenue. The following seven tactics will help hospitals minimize losses by effectively integrating newly employed physicians.

1. Measure twice, employ once Many hospitals today are on a practice acquisition “spree,” employing prac-tices they do not need and making financial commitments they do not yet understand. These acquisitions are expensive in terms of both upfront investment and future operating costs. They also carry a steep opportunity cost since they take capital away from other growth projects.

To avoid wasting money on unnecessary acquisitions, start by developing a sound physician strategy. Most hospital planners focus on high-end special-ties such as cardiology, neurology and oncology, but it is also important to build the primary care base that will feed these services. Once your strategy is set, insist that all potential acquisitions align with defined strategic needs.

For every promising acquisition target, develop a financial pro forma to model the practice’s performance under hospital ownership. The pro for-ma should take into account productivity, expenses, compensation, payor mix, current contracts and existing staffing. Include a network allocation to cover hospital administrative overhead. Use industry benchmarks, such as data from the Medical Group Management Association, to identify op-portunities for improvement and cost control. A realistic pro forma will enable the hospital to forecast an employed practice’s expected net operat-ing income — or its potential losses.

2. Maintain the link between productivity and pay Private practice physicians are accustomed to a lean organizational struc-ture. Joining a large health system with complex demands can reduce physi-cian productivity. To maintain productivity once employment begins, de-velop compensation plans that incorporate performance incentives. For example, tie physician salary to work RVUs and include bonuses for meet-ing quality metrics aligned with value-based care programs.

Alternatively, engage physicians under a provider services agreement. A PSA allows a hospital to collect revenue for an independent practice, pay its salaries and reimburse its operating expenses. Productivity expectations can be built into the compensation agreement. A PSA is often preferable when full acquisition would require purchasing a physician’s office building. It can also make sense for a physician who would prefer a trial employment period before signing a long-term contract.

3. Establish and optimize payor relationships Newly employed physicians need to be credentialed with several payors. Un-fortunately, most hospital employees are unfamiliar with physician creden-tialing. A hospital system in the Southwest experienced this problem with a multi-specialty spine practice it acquired in 2011. Administrative staff spent a full year attempting to credential the physicians and non-physician providers

FEATuRE

30 Physician-Hospital Relationships

with the hospital’s workers’ compensation contracts. During this period, the system lost approximately $500,000 on under-reimbursed care.

To avoid this scenario, create a centralized team whose sole responsibility is to manage physician credentialing. Develop standardized processes and employ a dedicated software application to ensure credentials for all pro-viders stay completely up to date.

As part of the credentialing process, take steps to optimize payor con-tracts. Many private practices accept health plan contracts indiscriminately, regardless of adverse fee schedules or adjustment policies. When a physi-cian joins your organization, analyze the practice’s payor mix and identify health plans to eliminate or leverage for better rates.

4. Declare war on payor denialsAccording to the MGMA, medical practices have an average claim denial rate of 30 percent on first submission. Unfortunately, these denial prob-lems can get even worse after acquisition. To maintain practice revenue, hospitals need to devote resources to combating payor denials. Here’s how:

• Create effective workflows. Establish solid processes for enter-ing charges, submitting claims, posting payments and appealing re-jections. Assign clear responsibilities, whether the work is organized through a central billing office or a dedicated biller for each physician.

• Set benchmarks and monitor collections. Establish key practice indicators for collections (daily, weekly, monthly) and denials by type (coding denials, prior authorization, etc.). Compare KPIs to industry benchmarks and act on variances.

• Create a denial follow-up process. Appealing denials is labor-intensive, but it is crucial to maintaining revenue. Establish processes and timelines for denial follow-up. Identify staff members with the best ap-peal success rates and share their methods across the organization.

• Consider outsourcing. Contracting with a billing company or management services organization to manage the physician revenue cycle may be less expensive and more efficient than maintaining op-erations in-house.

5. Strike a balance on EHRMany physician electronic health record systems do not integrate well with hospital IT systems and do not support population management goals. Yet, forcing physicians to adopt the hospital EHR system can be dangerous. Hos-pital EHRs are usually too expensive and complex for ambulatory providers.

Strike a balance between permissiveness and rigidity on EHR. One system will not work for all specialties and practice sizes, so study popular compat-ible vendors to find a range of appropriate options. All approved systems should support the hospital’s strategic goals.

Take a project management approach to EHR implementation. Create IT project teams to work directly with practices to optimize system capabili-ties. Before implementation, perform an onsite workflow analysis to spot opportunities to redesign daily practice operations. Wasteful workflows will only be exacerbated with a new EHR system.

As part of the workflow analysis, perform a meaningful use gap analysis to make sure practices can earn government EHR incentives. The additional reimbursement will offset costs and help ensure the hospital gets the most value from its EHR investments.

6. Provide “concierge onboarding”Transitioning physicians to employment is a 90- to 180-day process that requires attention to hundreds of details. Important steps can slip through the cracks, causing frustration and negative first impressions for newly em-ployed physicians. The solution? Establish a well organized onboarding approach that emphasizes physician service.

Create an onboarding checklist with deliverables, timeframes and mile-stones. Cover activities such as human resources orientation; IT assessment and connectivity; revenue cycle optimization; office workflow redesign; credentialing and contracting; and marketing integration. Make the list as detailed as possible — down to ordering supplies and new office signage.

Streamline the process for physicians. In many health systems, new physi-cians might have to interact with a dozen departments to iron out details in finance, HR, IT, etc. Instead, assign one liaison to each acquired practice to serve as the go-between and project manager for all onboarding issues.

The concierge approach enables the hospital to customize the onboarding process to the specific needs of individual practices. Making sure every practice is “good to go” on day one will help maintain continuity in pro-ductivity and patient care.

7. Lay the groundwork for clinical integrationThe ultimate aim of physician employment is to achieve greater coordina-tion around clinical improvement and cost management. Hospitals will re-ceive less than full value on any employed practices that do not contribute toward this goal. Onboarding efforts need to focus on aligning physicians with clinical integration objectives in quality, patient care and cost control.

First, establish measurement processes within acquired practices. Physi-cians and practice staff will need the right workflows, processes and IT tools to reliably capture cost and quality metrics.

Second, create feedback systems to keep physicians focused on system goals. Provide regular dashboard reports with KPIs in productivity, patient volume, budget performance and clinical quality outcomes. Hold regular operations reviews (monthly or quarterly) to give physicians feedback on practice performance.

Most importantly, establish organizational milestones for cost and outcomes goals. Physicians need to understand how they can help the system develop disease management initiatives, transition from fee-for-service to value-based payment and prepare to operate as an accountable care organization.

Smooth transitions require preparationWithout appropriate preparation, hospitals stand to lose significant money on employed physicians. The key to a sustainable investment is to focus on sound strategy, aligned incentives, practice efficiency and clear overall goals. Optimizing practices clinically, operationally and financially during the onboarding phase will minimize losses and help hospitals get the most out of physician employment. n

Sabrina Burnett and Cami Hawkins, MHA, are vice president and managing associ-ate, respectively, at Health Directions, a national healthcare firm dedicated to improving the financial, operational and strategic performance of hospitals, medical groups and physician practices. They can be reached by phone at (512) 795-5500 or by email at [email protected] or [email protected] .

Risk area Potential loss Mitigation strategy

Market strategy Acquired practice does not support service line strategy and drains needed resources from other strategic investments

Build physician strategy on well designed service line plan; use plan to analyze acquisitions

Productivity Employment dynamics and new demands of health system participation reduce patient volume and practice productivity

Introduce compensation incentives for productivity, quality and cost control

Capital investment Acquisition includes purchase of office building, high-cost equipment or other physical assets

Contract with physician under a provider services agreement to minimize capital request

Payor contracting Practice carries underperforming health plan contracts with low fee schedules, restrictive policies and frequent payment delays

Subject newly employed practices to payor review; drop or renegotiate low-fee contracts

Revenue cycle Practice loses revenue on inefficient coding and billing and high denied claims rate

Add expertise in physician billing; centralize revenue cycle operations or outsource to a third party

Technology Practice EHR system is incompatible with hospital system, but hospital EHR is too complex and expensive for practice staff

Support a range of ambulatory EHR systems and provide implementation project management

Clinical integration Practice does not support quality, safety and cost control goals of overall health system

Set quality and cost milestones aligned with hospital goals; provide support and performance feedback

The high cost of physician onboarding

A well-designed physician onboarding process can prevent many early mistakes and optimize the financial and strategic performance of acquired practices.

Source: Health Directions, LLC

32 Executive Briefing: Value-Based & Accountable Care

Sponsored by:

Financial Modeling: Predictive Insight into Value-Based Care SuccessBy Heather Punke

Since the Patient Protection and Affordable Care Act passed in 2010, healthcare provider organizations have explored sharing in cost savings with other providers and/or payors and taking on risk

through accountable care organizations and other value-based care models.

While the ACO model has flourished as of late, many hospitals and health systems are still reluctant to join the movement. In fact, 75 percent of hospitals polled by the Commonwealth Fund were not considering ACO participation at all, according to a report published in August 2012.

The hesitancy is understandable: Accountable care is a threat to traditional hospital and health system revenue streams. But Eric Olmsted, PhD, direc-tor of analytic consulting for Lumeris, a healthcare technology firm, says not participating in the new care delivery model may be even worse. “Hos-pitals are more likely to lose money if they don’t participate in forming accountable care organizations,” says Dr. Olmsted.

When hospitals and health systems choose not to help shape accountable care, they miss an opportunity to strategically address serious challenges that affect their revenues, such as declining utilization, network leakage, high-risk transitions of care and the evolving role of the emergency room as an essential health benefit under health insurance exchanges.

“Accountable care is likely going to be the solution to the current ailments in the United States’ healthcare system, and hospitals stand to gain in mov-ing to value-based care models,” Dr. Olmsted says. “By being an active participant, they can control how accountable care is designed, delivered and measured.”

So, while there no doubt are financial risks to participating in accountable care, it can be even more risky not to be involved. Fortunately, there is a way to offset some of the inherent financial risks: strategic financial modeling.

Financial modeling 101A financial model can help hospitals and health systems prepare for and make a successful transition to accountable care. A good financial model is comprehensive, including enrollment and claims data, hospital financial data and local market condition information. It arms hospitals and health systems with predictive insight to make decisions about strategic next steps and investments needed to transform their organizations, reshape revenue models and make money in a value-based care model.

More specifically, a financial model allows hospitals and health systems to analyze different investment scenarios. For example, a hospital may want to invest in care managers as part of their ACO. The model would show the impact of that investment. “The organization can then tailor investments to achieve the desired outcome,” Dr. Olmsted says.

Usually, organizations move one segment of a population to accountable care at a time, such as moving Medicare patients to an ACO after join-

ing the CMS Medicare Shared Savings Program. Most organizations focus solely on the impact of accountable care on that patient population, but the change goes further than that. “Financial modeling looks at the impacts on the target population and also the impact on the remainder of the popula-tion still in a fee-for-service model. It can reveal opportunities to improve care outside of the value-based care population,” Dr. Olmsted says.

A financial model can be completed either while an organization is con-templating value-based care or already building and operating an ACO.

BenefitsPutting together a financial model can make the challenging transition to accountable care a little easier for hospitals and health systems. Here are four ways financial modeling helps:

1. Anticipate case mix change. Usually, one sign of a successful transition to accountable care is a reduction in the number of medical admissions, which can mean a reduction in revenue for the organiza-tion. That means the facility’s case mix becomes heavily weighted on surgical admissions. “We can help them anticipate the changes in the case mix and…surgical volume,” Dr. Olmsted says. “There are types of investments you need to make for that scenario,” he explains, and a financial model can help determine what the level of those invest-ments should be.

2. Leverage competitive advantages in the market. With re-duced admissions come empty beds, which, again, can negatively impact a hospital’s revenue stream. However, those beds do not necessarily need to stay empty, and hospitals can begin to focus on expanding their popu-lar service lines. Administrators can use the financial model to determine some of the underserved needs of patients in the area and start building service lines around those in order to boost elective admissions.

3. Understand the impact of a specific contract. Account-able care reimbursement contracts include quality metrics that organi-zations need to meet in order to share in any savings. A financial model can help organizations understand how they are currently doing on those quality measures, anticipate if they can hit the contract’s targets and help determine what future contracts should look like. “The model can help negotiate future versions of the contract,” Dr. Olmsted ex-plains. “A hospital might want to take on more risk as it has gotten better at managing its population’s health,” he says, which can be mea-sured by the financial model.

4. Communicate better with physicians. Hospitals and health systems are not the only ones skittish about buying into accountable care: Physicians have also expressed caution when approaching the new care delivery model. “We hear from physicians that they understand ac-countable care is happening, but are interested in seeing specific data and scenarios played out,” says Andrew Goodman, a consultant with

34 Executive Briefing: Value-Based & Accountable Care

28 Statistics on Providers and ACO DevelopmentBy Molly Gamble

Here are 28 survey findings on members of the American Medical Group Association and their current status in accountable care business ventures.

Figures reflect responses from 62 AMGA members in July 2012. Seventy-seven percent of respondents were comprised of multi-specialty medical groups or integrated delivery systems, whereas less than 10 percent of re-spondents were physician-hospital organizations, independent physician associations, academic medical centers or single-specialty practices.

Are you considering undertaking any one of the following accountable care business ventures?

• Partnering with a commercial insurer and/or hospital for a medical home or accountable care project — 44 percent

• Enhancing primary care services to become a medical home — 39 percent

• Partnering in other care coordination programs or with care coordi-nation partners — 38 percent

• Merging with or acquiring other medical groups, IPAs or hospitals — 31 percent

• Partnering with a hospital on an initiative to reduce avoidable read-missions — 31 percent

• Medicare’s Shared Savings ACO Program — 28 percent

• Advance payment ACO model — 8 percent

• My organization is not participating in or considering an accountable care business venture at this time — 5 percent

• Medicare’s Pioneer ACO Program — 0 percent

• Don’t know / None of these listed — 10 percent

• Other — 5 percent

Is your organization participating in one of the following ac-countable care business ventures?

• Enhancing primary care services to become a medical home — 52 percent

• Partnering with a commercial insurer and/or hospital for a medical home or accountable care project — 50 percent

• Partnering with a hospital on an initiative to reduce avoidable read-missions — 36 percent

• Merging with or acquiring other medical groups, IPAs or hospitals — 34 percent

• Partnering in other care coordination programs or with care coordi-nation partners — 32 percent

• Medicare’s Shared Savings ACO Program — 27 percent

• Medicare’s Pioneer ACO Program — 10 percent

• Advance Payment ACO model — 2 percent

• Don’t know / None of these listed — 10 percent

• Other — 5 percent

Fifty-nine percent of respondents indicated they would part-ner with another organization to participate in or consider an accountable care business venture. What type of organiza-tion are respondents’ organizations partnering with?

• Health plan — 36 percent

• Hospital — 22 percent

• Medical group — 9 percent

• Other provider organization — 13 percent

• State or local government — 2 percent

• Management services organization — 0 percent

• Don’t know — 18 percent n

Lumeris’ strategy and consulting services. “Financial modeling offers a tool for CFOs and other leadership, giving them information to engage and communicate with physicians,” he explains. The model can inform the conversations between administrators and physicians in a hospital or system contemplating a value-based model of care.

Financial modeling can be a great resource for hospital and health system

executives who may be hesitant to make the important switch to account-able care. “You don’t want to be left behind,” says Mr. Goodman. “These kinds of…models can really help with a difficult transition.”

Whether an organization is just starting to think about ACOs or other new delivery models, or it has already started down that road, sophisticated financial modeling can help ensure its success in the future. n

Lumeris is an accountable care delivery innovation company offering health systems, payors and providers operational support, technology, and consult-ing services. The company’s technology platform integrates data from disparate systems across the continuum of care, and provides complete visibility into the clinicalandfinancialperformanceofanenterprise. ThedepthandbreadthofLumeris’solutionsandexperienceinaccountablecare,makethecompanyanidealpartnerforanyhealthcareorganizationseekingthesignificantbenefitsofabetter connected, aligned and informed accountable delivery system.

36 Finance & Revenue Cycle

routinely be overlooked are shipping costs. Mark Bogen, CFO of South Nassau Communities Hospital in Oceanside, N.Y., says a few years ago, his hospital’s inbound shipping costs averaged around $500,000 per year. However, South Nassau saved $75,000 simply by leveraging its buying power with carriers.

“The problem is [shipping] doesn’t get separately coded, and it gets buried in hospitals’ general ledger, so you don’t have a good idea of how much you’re spending on in- and outbound delivery,” Mr. Bogen says. “But you need to take advantage of those situations where vendors are having dif-ficulties closing sales. If they ain’t crying, we ain’t buying.”

Furthermore, hospitals can save thousands by reducing overnight shipping for operating room supplies, he says.

2. Implement a wellness and disease management program for employees. Laura Zehm, CFO of Community Hospital of the Monterey (Calif.) Peninsula, says she and the rest of her peers have consis-tently asked themselves how they can find innovative ways to save money at their 284-bed independent hospital. In 2008, they turned their attention to the hospital’s health benefits plan, which increasingly ate up more of CHOMP’s budget.

“I found myself sitting at board meetings saying, ‘Yeah, healthcare costs are going up, employees are getting older, but there’s nothing we can do about it.’ That’s something you never want to say to your board as a CFO,” Ms. Zehm says.

CHOMP turned to the Asheville Project as a model to implement a new wellness and disease management program for its employees. The Ashe-ville Project was an effort by the city of Asheville, N.C., a self-insured employer, to provide better oversight and education to its employees for chronic health problems, such as diabetes and asthma.

Ms. Zehm says employees receive financial incentives in the form of lower health insurance premiums if they are active participants in the wellness program and complete or show improvement in tasks in five main wellness categories. For example, if a diabetic employee enrolls and participates in diabetic coaching and gets his or her biometrics checked, the individual’s health premiums will go down.

Many other hospitals and health systems are engaging in these types of wellness initiatives, and there are significant savings to be found, Ms. Zehm says. In 2009, CHOMP’s per-member, per-month health costs were $705.65. In 2012, that figure dropped almost 15 percent to $602.25 per member per month. “We’re making it easier for employees to [take care of themselves], and it has saved us millions of dollars per year,” she says.

3. Improve landscaping irrigation. Many hospital CFOs and finan-cial leaders may feel like they have hit a wall when it comes to finding new cost savings. There are only so many items and processes that can be cut or altered, right?

For Kay Winokur, RN, vice president of quality, safety and accreditation at Beaumont Health System in Royal Oak, Mich., that simply isn’t true today. Ms. Winokur, who also is a LEED green associate, recently helped Beau-mont create “kaizen” teams specific to energy and water reduction oppor-tunities. “Kaizen” translates to “improvement” in Japanese, and Beaumont’s kaizen teams — which are all led by various Beaumont employees — scour the main campus every month to find quick and sustainable savings.

One of the first initiatives from Beaumont’s kaizen teams was to redirect and cut back usage of the health system’s irrigation system.

“With our landscaping, we found some plants that we removed and peren-nial plants that were dying anyway, but we were still watering [those areas],” Ms. Winokur says. “So we turned off the sprinklers in the area, and that saved 500,000 gallons of water every year. Unless you go out and walk, you won’t notice these things.”

In addition, the teams changed out sprinkler heads on two of Beaumont’s campuses to low-flow models, which saved more than $180,000 during the six-month watering season.

4. Remove and reduce lighting. In recent years, Beaumont has com-mitted to investing in energy efficient lighting and fixtures. While this may seem like a financial drain instead of a balance sheet saver due to the initial upfront costs, Ms. Winokur notes she and her teams found ways to reduce inefficient lighting with little to no cost at all.

At Beaumont, leaders have reduced the number of bulbs in multiple-light fixtures where possible, eliminated unneeded lighting in areas like chart racks that are now digitized and installed switches in rooms and areas where lights do not need to be on at all hours of the day.

On average, lighting costs are 16 percent of a hospital’s total energy con-sumption, and switching to different lighting can save hospitals and health systems tens or even hundreds of thousands of dollars every year. For example, Chicago-based Resurrection Health Care is saving $900,000 every year just by making the switch from high-energy lamps and ballasts to more efficient ones.

5. Revamp the chilled water system. Hospitals have a lot of re-sponsibility when it comes to keeping the patient environment safe and sterile, and chilled water systems — which are the backbone for air condi-tioning — play a central role.

9 Ingenious Ways to Cut Costs at Your Hospital (continued from page 1)

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38 Finance & Revenue Cycle

At North Shore University Hospital in Manhasset, N.Y., executives and leaders decided to invest $8 million into a new chilled water distribu-tion system. Neil Rosen is director of sustainable development and facili-ties services at Great Neck, N.Y.-based North Shore-Long Island Jewish Health System — the parent organization of North Shore University Hospital. He says although this was a large upfront cost for North Shore-LIJ’s flagship hospital, it allowed the entire plant to more efficiently cool water and keep temperatures under control. He says the new system has resulted in annual savings in excess of $1.3 million — meaning these types of initiatives still have a reasonable return on investment for cost-conscious CFOs.

At Beaumont, Ms. Winokur says the health system replaced its chilled water system with a continuous loop design — saving more than $37,000 every year with an ROI of 16 months. Furthermore, the kaizen teams retrofit-ted numerous water fountains with spouts to fill water bottles specifically — while unplugging the remaining water fountain chillers — saving up to $14,000 annually.

6. Install solar panels in sunny areas. Solar energy has been around for a long time, but it is finally reaching a point where it is more economical for hospitals and health systems to invest. In fact, some hospitals may be able to apply for grants and rebates to offset the upfront costs — all while enjoying the cost savings.

In 2010, leaders at North Shore-LIJ’s Southside Hospital in Bay Shore, N.Y., installed a solar panel system on the hospital’s roof. The total proj-ect cost roughly $300,000, but Mr. Rosen says the hospital was able to receive a $270,000 federal grant from the New York State Energy Re-search and Development Authority. All in all, the project cost Southside Hospital less than $30,000, and the solar panels have saved the system almost $12,000 to date.

7. Replace inefficient sinks, toilets and urinals. When it comes to any business, hospitals included, bathrooms are rarely thought of as an area of cost savings. They serve one purpose very well and are often ignored unless a major issue arises.

However, Ms. Winokur says Beaumont has saved about $257,000 annually in water costs by converting their inefficient sinks, toilets and urinals to low-flow models. For hospitals willing to take the extra step, there are also waterless urinals available.

“Hospitals can emulate what we are doing and use that as a road map,” Ms. Winokur says, adding that this and other initiatives have been the products of “interested employees.”

8. Look closely into new recycling initiatives. Most hospitals and health systems today are involved in some type of recycling program, but there are many different types of recycling programs out there, some of which can lead to greater savings.

For example, Mr. Rosen says the 16-hospital North Shore-LIJ Health Sys-tem has actually brought in more than $600,000 from its recycling pro-gram. “With little to no cost — just the bins, posters and education com-ponents — we have diverted 6,190 tons of waste from the landfill from 2009 to 2011,” he says.

9. use timers to heat coffeepot water only during business hours. Even an item as small and simple as a coffeepot was able to save Beaumont $34,000 per year, Ms. Winokur says.

Previously, Beaumont’s 1,070-bed Royal Oak campus had 110 commer-cial-sized coffeepots, all of which heated water to make coffee around the clock. However, many employees in those areas with a coffeepot are gone in the evenings and on weekends, which led a kaizen team to suggest using timers on all coffeepots. Now, coffeepots are shut down when employees leave for the day, and they restart an hour before employees arrive in the morning.

“We wouldn’t have gotten [this saving] if we didn’t go and observe,” Ms. Winokur says. “Look at everything that is plugged in and draws energy and ask if you need it 24/7. Can it be powered down?” n

In 2012, Moody’s Investors Service down-graded $20 billion in non-profit hospital and health system debt — a 213 percent

increase from 2011 and the highest amount of downgraded debt since Moody’s started tracking the data in 1995, according to a new report from the credit rating agency.

The amount of downgraded debt for non-profit hospitals and other healthcare providers was also more than double the $9.7 billion of upgraded debt. Carrie Sheffield, a Moody’s as-sociate analyst, said the large downgrade figures were attributable to declines in patient volume and weak revenue growth.

“The downgrades were also driven by declines in liquidity, more competition, increased debt load

and many hospitals faced management and gov-ernance issues and pressures on pension fund-ing,” Ms. Sheffield added.

Three large health systems contributed to more than half of the downgraded debt in 2012. Roughly $13 billion of the downgraded debt was spread among Englewood, Colo.-based Catho-lic Health Initiatives, San Francisco-based Dig-nity Health and New York City-based Memorial Sloan-Kettering Cancer Center.

Moody’s also found that credit downgrades for non-profit hospitals and health systems outnum-bered upgrades 40 to 38. Both credit rating tal-lies were lower in 2011, at 23 upgrades and 34 downgrades. n

Moody’s: Record $20B of Non-Profit Healthcare Debt Downgraded in 2012By Bob Herman

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May 9-11, 2013 • Westin Michigan Avenue - Chicago, Illinois83 Great Health System Executives Speaking

Great topics and speakers Focused on Strategy, Physician Hospital Integration, Improving Profi tability, ACOs, and Key Specialties - 93 Sessions - 160 Speakers

• Coach Lou Holtz - former college football coach, actice sportscaster, author and motivational speaker

• Bryan Becker, MD, MMM, FACP, FNKF, Associ-ate Vice President Hospital Operations and Chief Executive Offi cer, University of Illinois Hospital

• Barry Arbuckle, PhD, President & Chief Executive Offi cer, Memorial Care Health System

• Robert C. Garrett, President & Chief Executive Offi cer, Hackensack University Medical Center

• Kevin Vermeer, Chief Financial Offi cer, Iowa Health System

• Bret Baier - Fox news anchor on Special Report with Bret Baier, former chief White House cor-respondent

• Barbara Martin, President & Chief Executive Offi cer, Vista Health System

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• Steven I. Goldstein, President and Chief Executive Offi cer, Strong Memorial Hospital

• Sally I. Nelson, Chief Executive Offi cer, Huntsville Memorial Hospital

• Alan Channing, President & Chief Executive Offi cer, Sinai Health System, Chairman Elect, Illinois Hospital Association

• Daniel F. Evans, Jr., President and Chief Executive Offi cer, Indiana Univer-sity Health

• Michael Ugwueke, DHA, FACHE, Senior Vice President/Chief Executive Offi cer, Methodist Healthcare - North and South Hospitals

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• Patrick Lencioni - founder and president of Th e Table Group, author of ten best selling books

• Leslie D. Hirsch, President & Chief Executive Offi cer, Saint Clare’s Health System

• William Gil, Chief Executive Offi cer, Facey Medical Foundation

• Jonathan I. Lawrence, President & Chief Executive Offi cer, Lake Erie Regional Health System of New York

• Randy Oostra, DM, FACHE, President & Chief Executive Offi cer, ProMedica Health System

• Charles S. Lauer, Author, Consultant, Speaker, Former Publisher of Modern Healthcare Magazine

• Maria Ryan, PhD, Chief Executive Offi cer, Cottage Health

• Andrew Racine, MD, PhD, Senior Vice President & Chief Medical Offi cer, Montefi ore Medical Center

• Mike Williams, President and Chief Executive Of-fi cer, Community Hospital Corporation

• M. Michael Shabot, MD, Chief Medical Offi cer, Memorial Hermann Health System

• Stephen Mansfi eld, PhD, FACHE, President & Chief Executive Offi cer, Methodist Health System

• Paul R. Summerside, MD, MMM, Chief Medical Offi cer, BayCare Clinic, LLP• Joseph J. Guarracino, Senior Vice President & Chief Financial Offi cer, Th e

Brooklyn Hospital Center• Chris Van Gorder, FACHE, President & Chief Executive Offi cer, Scripps

Health, Past Chairman, American College of Healthcare Executives• David L. Bernd, Chief Executive Offi cer, Sentara Healthcare

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Becker’s Hospital Review Annual Meeting83 Great Health System Executives SpeakingGreat topics and speakers Focused on Strategy, Phy-sician Hospital Integration, Improving Profitability, ACOs, and Key Specialties

This exclusive conference brings together hospital business and strategy leaders to discuss how to improve your hospital and its bottom line in these challenging but opportunity-filled times.

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Thursday, May 9, 2013

11:30 – 4:30 PM – Registration and Exhibitor Set up

Concurrent Sessions

1:00 – 1:40 PMA. The Best Ideas for High Performing Hospitals Now

Pamela Stoyanoff, MBA, CPA, Executive Vice President - Chief Operating Officer, Methodist Health System, Chris Jones, Vice President, Strategy and Business Development, Catholic Health Initiatives, Leslie Hirsch, President and Chief Executive Officer, Saint Clare’s Health System and Robert C. Garrett, President & Chief Executive Officer, Hackensack University Medical Center moderated by Charles S. Lauer, Author, Consultant, former publisher of Modern Healthcare Magazine

B. Key Financial and Alignment StrategiesGary Weiss, Chief Financial Officer, NorthShore University HealthSystem, Kevin Vermeer, Chief Financial Officer, Iowa Health System, James Caillouette, MD, Surgeon in Chief, Hoag Orthopedic Institute, and Chuck Stokes, System Chief Operating Officer, Memorial Hermann Health System, moderat-ed by Paula Lovell, President, Lovell Communications

C. How Should a System Evaluate Its Physician Alignment Strategy

Randy Oostra, DM, FACHE, President and Chief Executive Officer, ProMedica Health System

d. How Alignment Strategies Impact Quality of Care

James Stone, MD, MBA, CMI, Medical Director - Surgery/EMS/EDI/Trauma, Page County Medical Examiner/Special Investigator, Clarinda Regional Health Center and Bruce G. Pitts, MD, Chief Medical Officer, Sanford Health

E. Orthopedic Focused Co-Management and Bundled Payment Initiatives

Sean McNally, Chief Executive Officer, Moore Clinic, Larry Taylor, President & Chief Executive Officer, Practice Partners in Healthcare

F. doctors are different, How doctors ThinkJeff Leland, Chief Executive Officer, Blue Chip Surgical Center Partners

G. Hospital-Physician Alignment Closing Health-care Organizations’ Capabilities Gap

Jill Schwieters, President, Pinstripe Healthcare

1:45 – 2:25 PMA. Strategy - Thinking 5 Months and 5 Years Into the Future

Nancy Vish, President & Chief Nursing Officer, Baylor Heart and Vascular Hospital, Linda Hoff, Chief Financial Officer, Meriter Health Services, President & Chief Executive Officer, Physicians Plus Insurance Corporation, Barbara Martin, President and Chief Executive Officer, Vista Health, Javon Bea, President and Chief Executive Officer, Mercy Health System, Andrew Racine, MD, PhD, Senior Vice President & Chief Medical Officer, Montefiore Medical Center, Moderated by Scott Becker, JD, CPA, McGuireWoods LLP

B. Protecting and Preserving the Community Hospital - Immediate Action for Future Success

Mike Williams, President and Chief Executive Officer, Community Hospital Corporation

C. Physician Alignment: Working Together to Coordinate Care and drive Value

Daniel J. DeBehnke, MD, MBA, Interim Chief Executive Officer, Medical College Physicians, Medical College of Wisconsin, Richard Ferrans, MD, ScM, System Vice President Clinical Integration and Accountable Care, Presence Health, Craig Rhyne, MD, Chief Medical Officer, Covenant Health and Michael Piver, Director Strategic Integration for Surgical Services, Tanner Health System, Moderated by Michael Glick, Senior Manager, Blue & Co., LLC


83 Great Health System Executives Speaking - Great topics and speakers Focused on Strategy, Physician Hospital Integration, Improving Profitability, ACOs, and Key Specialties - 93 Sessions - 160 Speakers

d. Creating a Best in Class Perioperative Service line under Accountable Care and Value Based Purchasing

Jeff Peters, President & Chief Executive Officer, Surgical Directions

E. Evaluating the Supply and demand of Physician Market Strategies and National Trends

Razvan Marinescu MD, MHA, FACHE, Associate Director, Planning & Business Development Methodist Healthcare and Kurt Mosley, Vice President of Strategic Alliances, Merritt, Hawkins & Associates, moderated by TBD

F. Key Considerations in a Co-Management Arrangement

Dean Thomas, Vice President of Clinical Service Lines, Scottsdale Healthcare, and Robert A. Minkin, MBA, FACHE, The Camden Group, moderated by Virginia S. Tyler, Vice President, The Camden Group

G. The Impact of Health Exchanges on Revenue and Value

Bill Woodson, Senior Vice President, Sg2 2:30 – 3:10 PMA. Physician Alignment Strategies, Co Management Joint Ventures, Employment and More

Randy Oostra, DM, FACHE, President & Chief Executive Officer, ProMedica Health System, Sally I. Nelson, Chief Executive Officer, Huntsville Memorial Hospital and Todd Mello, ASA, AVA, MBA, Partner & Founder, HealthCare Appraisers, Inc, Brian Silverstein, MD, Managing Director, GCG, Executive Product Strategist, xG Health Solutions, Geisinger Health System, moderated by Lindsey Dunn, Editor in Chief, Becker’s Hospital Review

B. Benchmarking and Assessing the Financial Strength of a Hospital

Ben Dunford, Chief Financial Officer, Texas Regional Center at Sunnyvale, Joseph J. Guarracino, Senior Vice President & Chief Financial Officer, The Brooklyn Hospital Center, James Garvey, Director, Health Care Operational Consulting, Wipfli, Dennis P. Hesch, Executive Vice President and Chief Financial Officer, The Carle Foundation, moderated by Timothy Baker, President, Principle Valuation, LLC

C. The latest and Greatest in Pay for Performance & ACOs

Jen Johnson, CFA, Partner, VMG Health

d. One leading Health System’s Journey to High Performance and Improvements in Quality and Patient Safety

M. Michael Shabot, MD, Chief Medical Officer and Chuck Stokes, MHA, FACHE, System Chief Operating Officer, Memorial Hermann Health System

F. Physician Compensation in a Value Based WorldJames Slaggert, Vice President of Operations, Physician Practice Management, Catholic Health Initiatives, William Gil, Chief Executive Officer, Facey Medical Foundation, moderated by Mary J. Witt, Senior Vice President, The Camden Group

G. Physician IntegrationJavon Bea, President and Chief Executive Officer, Mercy Health System

3:15 – 4:00 PMA. The Best Ideas for ACOs, PHOs and Shared Savings Agreements

Scott Sarran, MD, MM, Chief Medical Officer, Government Programs, Health Care Service Corporation, Michael A. Kasper, Chief Executive Officer, DuPage Medical Group, Michael Englehart, President, Advocate Physician Partners, M. Michael Shabot, MD, Chief Medical Officer, Memorial Hermann Health System, moderated by Scott Becker, JD, CPA, Partner, McGuireWoods LLP

B. The Capital Market View of the Hospital Industry

Jeff Taylor, Chief Financial Officer, St. Luke’s Health System, Michael Tretina, CPA, FHFMA, FACHE, Vice President and Chief Financial Officer, Mary Greeley Medical Center, and Peter S. Myhre, Senior Vice President, Wells Fargo Equipment Finance, moderated by Claudia Gourdon, Senior Vice President, National Marketing Manager, Healthcare Finance Group

C. Physician Employment: The Best Tactics and Ideas to Improve Operational and Financial Performance

Razvan Marinescu MD, MHA, FACHE, Associate Director, Planning & Business Development, Methodist Healthcare, Bill Breen, Senior Vice President, Physician Alignment, Methodist Healthcare, Imran Andrabi, MD, Senior Vice President and Chief Physician Executive Officer, Mercy Health Partners, moderated by Kate Carow, MB, FACHE, Principal, Carow Consulting

d. Engaging Physicians in the Patient ExperienceNancy Vish, President & Chief Nursing Officer, Baylor Heart and Vascular Hospital

E. Orthopedics and Spine - The Best Opportunities and Biggest Threats

Jeff Leland, Chief Executive Officer, Blue Chip Surgical, Julie Fleck, RN, CNOR, BHCA, Chief Operating Officer, Parkview Ortho Hospital, Bill Munley, Vice President Orthopedics and Professional Services, and Allen Marsh, FACHE, Ortho/Neuroscience/Surgery Service Line Director, CaroMont Health, Bon Secours St. Francis Health System, moderated by Helen Suh, Associate, McGuireWoods LLP

F. Key Strategies for Improving Revenue Cycle Performance

Russell Gardner, Revenue Cycle Management Consultant, Healthcare, and Kelly Utley, Chief Financial Officer, Memorial Health Center, moderated by Peter Cunningham, Chief Executive Officer, CCO Partners

G. Advanced Analytics and its Role in Transform-ing Health Care

David Costello, PhD, Chief Analytics Officer, Press Ganey

4:00 – 5:00 PM – KEYNOTEThe Advantage: Why Organizational Health Trumps Everything Else in Business

Patrick Lencioni, Founder and President of The Table Group, Author of Ten Best Selling Books

5:00 – 7:00 PMNetworking Reception, Cash Raffles and Exhibits

Friday, May 10, 20137:00 – 7:50 AM – Registration and Continental Breakfast

7:50 – 8:00 AM – Introductions

8:00 – 8:50 AM – KEYNOTEWinning Every day – A Game Plan for Success

Lou Holtz - former College Football Coach, Active Sportscaster, Author and Motivational Speaker

8:55 – 9:40 AM – KEYNOTE PANELHospitals and The Next Four Years, Where Should leadership Focus Their Energies?

Paul R. Summerside, MD, MMM, Chief Medical Officer, BayCare Clinic, LLP, Stephen Mansfield, PhD, President and Chief Executive Officer, Methodist Health System, Ruth W. Brinkey, FACHE, Chief Executive Officer, KentuckyOne Health, JP Gallagher, FACHE, Chief Operating Officer, NorthShore University Health System, moderated by Bret Baier, Fox News anchor on Special Report with Bret Baier, former chief White House correspondent

9:45 – 10:30 AM – KEYNOTE PANELThe Best Opportunities and Biggest Threats to Hospitals and Health Systems

Barry Arbuckle, PhD, President & Chief Executive Officer, MemorialCare Health System, Daniel Slipkovich, Chief Executive Officer, Capella Healthcare, and Sandra Bruce, President and Chief Financial Officer, Presence Health and moderated by Brett Baier, Fox News anchor on Special Report with Bret Baier, for-mer chief White House correspondent

10:30 – 10:45 AM - Networking Break and Exhibits

10:45 – 11:25 AMA. Redesigning Healthcare to Meet New Expectations

Michael Tarwater, Chief Executive Officer, Carolinas HealthCare System

B. Key Issues in Hospital and Health system Consolidation and Affiliation

Tim Rice, Chief Executive Officer, Cone Health, Daniel M. Cain, Co-Founder, New York, Cain Brothers & Company and Joseph R. Lupica, Chairman, Newpoint Health, moderated by Barton C. Walker, Partner, McGuireWoods LLP

C. Best Practices for designing ACO Financial Systems

Daniel J. Marino, President & Chief Executive Officer, Health Directions, LLC

d. Implementing ERM in Alignment with Strategic Planning Process

Charles Kolodkin, Executive Director, Enterprise Risk and Insurance, The Cleveland Clinic, Kreg Weigand, Partner, KPMG LLP, Tom Twinem, CPA, CIA, CHC, CFE, Director Corporate Compliance, Children’s Hospital and Health System, moderated



by Matthew Slife, Senior Project Manager, Financial Planning-Performance Improvement, The Cleveland Clinic

E. Improving Revenue Cycle Performance at Intermountain during an Era of Change

Todd Craghead, Vice President of Revenue Cycle Organization, Intermountain Healthcare

F. Commonly Overlooked Revenue Sources: How to Identify, Prioritize and Collect with the least Amount of Risk

Bruce Shapiro, Senior Vice President of Operations, CCS Revenue Cycle Management, and Tim Schmidt, Chief Executive Officer, Managed Care Advisory Group (MCAG)

G. Case Studies in Physician Integration SuccessLani Berman, MBA, Vice President, Performance Services and Donald L. Hicks, Senior Principal, Physician Strategies and Services, VHA, Inc.

11:30 – 12:10 PMA. The Key Financial and Physician Alignment Issues Facing large Health Systems and Hospitals

Steven I. Goldstein, President and Chief Executive Officer, Strong Memorial Hospital, Chris Van Gorder, FACHE, President & Chief Executive Officer, Scripps Health, Past Chairman, American College of Healthcare Executives, David L. Bernd, Chief Executive Officer, Sentara Healthcare, mod-erated by Charles S. Lauer, Author, Consultant, for-mer publisher of Modern Healthcare Magazine

B. Key Thoughts on Planning and Budgeting in Times of uncertainty

John Zell, CPA, Vice President of Finance and Chief Financial Officer, OSF St. Joseph Medical Center, John Vazquez, MD, Chairman, Department of Anesthesia, Chief Medical Officer, Sinai Medical Group, Janice E. Nevin, MD, MPH, Chief Medical Officer, Christiana Care Health System, Jeff Taylor, Chief Financial Officer, St. Luke’s Health System, Moderator, Ken Perez, Senior Vice President of Marketing and Director of Healthcare Policy, MedeAnalytics

C. Engaged Physicians Can Put You in the Top Performing Tier of Hospitals

Laura Dollison, MD, FACEP, Senior Vice President, TeamHealth East

d. TBd

E. Why do Hospitals Prefer to Own 50% of an ASC Joint Venture vs. 100% of an HOPd?

Tom Mallon, Chief Executive Officer and Founder, and Jeffrey Simmons, Chief Development Officer, Regent Surgical Health

F. Cultural Transformation - How Cultural Change is Critical to making Alignment Strategies Successful

Arturo Polizzi, Chief Human Resource Officer, Promedica Health System

G. Redefining the Patient ExperienceDeirdre Mylod, PhD, Executive Director, Institute for Innovation, Senior Vice President, Research & Analytics, Press Ganey

12:10 – 1:00 PM – Networking Lunch and Exhibits

1:00 – 1:40 PMA. Key Issues for Academic Medical Centers

Daniel F. Evans, Jr., President and Chief Executive Officer, Indiana University Health, Kenneth S. Polonsky, MD, Executive Vice President for Medical Affairs, The University of Chicago, Bryan Becker, MD, MMM, FACP, FNKF, Associate Vice-President, Hospital Operations and Chief Executive Officer, University of Illinois Hospital, moderated by Scott Becker, JD, CPA, Partner, McGuireWoods LLP

B. Physician Employment - Current Physician Compensation Trends and Considerations for Establishing FMV

Jim Carr, ASA, MBA, Partner, HealthCare Appraisers, Inc.

C. Outpatient Strategies in a Competitive MarketBrent Lambert, MD, FACS, President and Founder, Ambulatory Surgical Centers of America

d. Key Practices to Improve Infection Rates and Clinical Quality

Marion Martin, Director, RSFH Quality Improvement Services, Roper St Francis Healthcare

E. GI Focused Joint Ventures - Why They Can Make Sense for Hospitals

John Poisson, Executive Vice President & Strategic Partnerships Officer, Physicians Endoscopy, and Adam Henick, Senior Vice President of Ambulatory Care, Continuum Health Partners

F. Accessing Capital in the New NormalSteven W. Kennedy, Jr., Senior Vice President, Lancaster Pollard

G. Waste Not, Want Not - A Mandate for ReformMichael Gallup, President & Chief Operating Officer, TeleTracking Technologies, Inc. and Dina Pilipczuk, Assistant Vice President, Nursing, Finance and Resource Management, Rush University

1:45 – 2:25 PMA. Core Strategies to Succeed as an Independent Hospital - Can a Hospital Stay Independent?

Sally I. Nelson, Chief Executive Officer, Huntsville Memorial Hospital, Alan Channing, President & Chief Executive Officer, Sinai Health System, and W. Terry Howell, Ed.D, Senior Vice President, MedAssets, moderated by David Jarrard, President and Chief Executive Officer, Jarrard Phillips Cate & Hancock

B. Charting a Clear Course in Rough Seas - A New Perspective on Hospital and Health System Strategy

Sanjay Saxena, MD, Vice President & Partner, North American Hospital & Health Systems Practice Co-Leader, Booz & Company (N.A.) Inc.

C. Tiered Networks, Tight Alignment: The Opportunity in Health Care Reform

Allen Marsh, FACHE, Ortho/Neuroscience/Surgery Service Line Director and Daniel Tuffy, Service Line Director - Cardiac Services, CaroMont Health

d. Key Steps to Improve and Measure Clinical Outcomes

Maria Ryan, PhD, Chief Executive Officer, Cottage Hospital

E. Hospital Acquisitions of ASCsLuke Lambert, CFA, CASC, Chief Executive Officer, Ambulatory Surgical Centers of America

F. Evaluating the ROI of a Strong Hospitalist Program

Robert Bessler, MD, Chief Executive Officer, Sound Physicians

G. New Partnership Opportunities for Hospitals, Insurers and Physician Practices

Farzan, Bharucha, Partner and Director, Strategy Services, and Robert Langheim, Senior Manager, Kurt Salmon

2:25 – 2:55 PMNetworking Break & Exhibits

2:55 – 3:35 PMA. Collaborations Between Nonprofit and For-profit Hospital Systems

Scott Powder, Senior Vice President Strategic Planning, Advocate Health Care, Pete Lawson, Executive Vice President, Development, Health Management Associates, James E. Burgdorfer, Principal, Juniper Advisory, moderated by J. Jordan Shields, Principal, Juniper Advisory

B. Forming an ACO and Shared Saving ProgramKen Perez, Senior Vice President of Marketing and Director of Healthcare Policy, MedeAnalytics

C. Top Performing Group Practices - Best Practices and Great Ideas

Linda MacCracken, Vice President of Product Management, Truven Health Analytics, Joanne Detch, Vice President Physician Relations and Network Development, Advocate Health Care, and Elyse Forkash Cutler, President, Sage Health Strategy

d. Community Hospital Opportunities & Challenges

Rajiv Chopra, Principal, The C/N Group

E. In 18 Months, Radiology Could be Your Most Important Clinical Function

Hank Schlissberg, Chief Strategy Officer, and Frank Seidelmann, DO, Co-Founder, Chairman of Radiology and Chief Medical Officer, Radisphere National Radiology Group

F. Co-Management - Successfully Improving Performance Across the Continuum of Care

Gerald Biala, Senior Vice President of Perioperative Services and Matthew Kossman, Vice President, Surgical Care Affiliates

3:40 – 4:20 PMA. How to develop a Regional Hospital Strategy

Michael Ugwueke, DHA, FACHE, Executive Vice President & Chief Operating Officer, Methodist LeBonheur Healthcare, Valinda Rutledge, former KentuckyOne Market Leader and President of Jewish Hospital, Director of Patient Care Models Group, Center for Medicare/Medicaid Innovation, moderated by Lindsey Dunn, Editor-in-Chief, Becker’s Hospital Review



B. Strategic Cost Transformation; Making Sure Your Hospital is Fit for Growth

Timothy Curtis Bailey, Vice President and Co-Leader of the Hospital and Health System practice, Booz & Company (N.A.) Inc

C. The 6 Biggest Reasons Your Strategy Will FailScott Regan, Founder and Chief Execution Officer, AchieveIt

d. Clinical Transformation: Fundamentally Changing Clinical Processes to Achieve a Sustainable Advantage

Andrew Ziskind, MD, Managing Director, Huron Healthcare and Stephen A. Mette, MD, Chief, Department of Critical Care, Maine Medical Center, Associate Professor of Medicine, Tufts University School of Medicine

E. Activity Based Costing for Endoscopy unitsMichael J. Goldberg, MD, NorthShore University HealthSystem

F. Anesthesia and Perioperative Alignment in the Age of Health Care Reform

Michael B. Simon, MD, Regional Director, North American Partners in Anesthesia, Chairman, Department of Anesthesia, UPMC Hamot Medical Center, Chairman, Department of Anesthesia, Macneal Hospital

G. Healthcare Marketing and Branding: Successful Strategies, Tactics & Techniques

Rhoda Weiss, PhD, National Healthcare Consultant, Speaker, Author & Editor, Marketing Health Services Magazine

4:25 – 5:10 PMA. Accountable Care Organizations, driving Operational Success Through leveraging Information Technology

William Bithoney, MD, FAAP, FAANP, Bithoney and Associates ACO Group, Bob Edmondson, MPH, FACHE, Chief Strategy Office, Carroll Hospital Center

B. Key Trends in Valuing Practice AcquisitionsKevin M. Florenz, Director of Capital Asset Valuation Services and Colin M. McDermott, Senior Manager, CFA, CPA/ABV, VMG Health

C. Employed Physician Group Performance: Moving from Aggregation to Assimilation of Practices Inside large, Hospital Employed Physician Groups

Allen D. Kemp, MD, Chief Executive Officer, Centura Health Physician Group, Luke Peterson, Principal, Health System Advisors

d. Resource Optimization: Enhanced EBIdTA Guaranteed!

Richard Kunnes, MD, Managing Principal & Chief Executive Officer, The Sevenex Group

E. The Best Ideas for ASC Joint VenturesJason Cagle, Senior Vice President and General Counsel, United Surgical Partners International and Robert Zasa, MSHHA, FACMPE, Managing Partner and Founding Partner, ASD Management, moderated by Amber McGraw Walsh, Partner, McGuireWoods LLP

F. A Tale of Two Coasts: What Hospitals and Health Systems Can learn from California and Massachusetts

Walter W. Morrissey, MD, Senior Vice President

Kauffman Hall with Dan Clarin, Assistant Vice President, Kaufman Hall

5:15 – 6:30 PMNetworking Reception, Cash Raffles & Exhibits

Saturday, May 11, 20137:15 – 8:15 am – Continental Breakfast

8:15 – 9:00 AMA. 8 Key Issues Facing Hospitals 2013

Scott Becker, JD, CPA, Partner, McGuireWoods LLP

B. Orthopedic Service line Vision for Present and Future Success

Bill Munley, Vice President Orthopedics and Professional Services, Bon Secours St. Francis Health System

C. using the ER as a Hospital Front door and Revenue Generator

John G. Holstein, Director, Medical Management Professionals, Mark Mackey, MD, MBA, FACEP, Vice - Chairman Clinical Operations, Department of Emergency Medicine, University of Illinois at Chicago Hospital and Chief Financial Officer, and Richard Jones, Senior Vice President and Chief Financial Officer, Reading Health System

d. Getting Peer Review to WorkTodd Lang, MD, Medical Director of Emergency & Trauma Services, Lourdes Health Network

E. Strategies to Ease EHR Adoption and Meaningful use Attestation in a Critical Access Hospital

Rita McDaniel, RN, Director of Nursing Informatics and Devin Carpenter, RN, Assistant Director of Nursing, Parmer Medical Center

9:05 – 9:45 AMA. The Evolving Health Care landscape: Envisioning 2030

Lori Schutte, MBA, President, Cejka Executive Search

B. leveraging lessons learned from Medicare’s Bundled Payments for Care Improvement Program

Jonathan Pearce, CPA, FHFMA, Principal,, Singletrack Analytics and Kelly Price, Director, DataGen group, Hospital Association of New York State

C. Preparing for ICd-10Deborah Grider, CCS-P, CDIP, CPC, CPMA, CPH-C, CPC-P, Senior Manager, Revenue Cycle, Blue and Co., LLC

d. New Ideas for Infection Control & SafetyAdam Boris, Chief Executive Officer, IC-Net, Dotty Bollinger, Chief Operating Officer, Laser Spine Institute, and Morris Miller, Chief Executive Officer, Xenex, moderated by Katherine C. Lin, Associate, McGuireWoods LLP

E. Assessing the Impact of Your Hospitalist Scheduling Model on Physician Subsidy

Jeffrey Taylor, President and Chief Operating Officer, IPC The Hospitalist Company

9:50 – 10:30 AMA. Creating a Meaningful Affiliation Between Health Care Organizations and Physician Partners

Jeff Wasserman, President, JW Healthcare Strategies and Jonathan I. Lawrence, Chief Executive Officer and President, Lake Erie Regional Health System of New York

B. Setting up Successful Physician Compensation Models

Craig Fowler, Vice President of Recruiting, Training and Public Relations, Pinnacle Health Group and Jeffrey Freygang, FACHE, Associate Administrator, Boys Town National Research Hospital

C. Vertical Marketing - Great Practices and Case Studies

Dick Pepper, Vice President, Business Execution, VoxMD

d. Integration Strategies for Financial Success, Financial Management: Chief Financial Officer Strategies

Keith E. Chew, Senior Strategic Consultant, McKesson

E. Codes That MatterFletcher Lance, Vice President, North Highland Company and Cody Schmits, Manager, North Highland Company

10:35 – 11:15 AMA. The Changing landscape of Chief Executive Officer and CFO Compensation

James E. Rohan, Vice President and Managing Director, Sullivan, Cotter and Associates, Inc.

B. using Technology to Create the ultimate Revenue Cycle

Christine Kutt, Executive Consultant, Healthcare Revenue Cycle Solutions, Vantiv

C. How Cloud-based Services Empower Clinical Integration

Stephen Kahane, MD, President, Enterprise Solutions, athenahealth

d. How to Implement Clinical Service lines with dyad leadership

William K. Cors, MD, MMM, FACPE, Chief Quality Medical Officer, Pocono Health System

E. Rebuilding the Clinical Enterprise in Progressive Steps Across Payment Structures: Keys to Success

Stephen Kardon, Principal, North Highland Company

11:20 – 12:00 PMA. The Key legal and Risk Areas Facing Hospitals - From Anti Kickback, False Claims to Stark and Back to Anti Trust

Scott Becker, JD, CPA, Partner, Barton Walker, Partner, Gretchen Heinze Townshend, Associate, and Holly Carnell, Associate, McGuireWoods LLP

B. Analyzing the Financial Impact of ICd 10 - Practical Considerations to Minimize losses in Productivity, Cash Flows and Profits, and Mitigate Risk for Compliance

Laura DeBusk, Senior Director, Business Development, White Plume Technologies, and Deborah Grider, CCS-P, CDIP, CPC, CPMA, CPC-H, CPC-P, Senior Manager Revenue Cycle, Blue and Co., LLC

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46 Executive Briefing: Partnership Opportunities to Meet Reform’s Demands

Over the past three years, hospital and health system CEOs have become in-creasingly focused on closing business

deals with physician practices or other providers in search of new growth opportunities, but there is some risk that the patients’ perspective will be lost in this flurry of activity. Hospital, payor and physician leaders need to ensure their strategies are keenly focused on improving patient care. Becoming more aligned, together, is a growing trend in healthcare affiliations.

With new payment models aimed at rewarding value created over volume growth, physicians, hospitals and payors have an unprecedented opportunity to align around the interests of pa-tients. In the past, the only way providers and payors could share in the value created through better patient outcomes and higher-quality care was if they were part of a fully integrated pro-vider and financing system. Fragmentation has thus far resulted in competing priorities for these two sides.

But with health systems, physicians and payors under significant pressure to reduce costs and improve quality, all parties are exploring new relationships that have the potential to create shared value by improving quality, eliminating inefficiencies and aligning shared incentives. In-dependent community hospitals may also feel enticed to enter into these types of partnerships.

Hospitals and health systems can no longer af-ford to wait on the sidelines and miss out on opportunities to form new relationships with physician groups and insurers. Hospitals and health systems deciding to wait to develop these relationships may lose their strategic position-ing in the market and diminish their ability to construct affiliations that fit with their strategic priorities. Market-leading organizations will not stand still in this uncertain time.

Recent trends In the past three years, systems have increasingly sought affiliations with each other via mergers and acquisitions to create scale. Further, busi-ness arrangements with physicians and acquisi-tions of physician groups to increase alignment

are accelerating at a pace not seen since the 1990s. More recently, these partnerships have evolved to include payors.

Insurance companies, faced with pressure to increase premiums in a stagnant economy and the need to cover a greater mix of patients, have sought to gain more predictability over how care is delivered by acquiring large physician prac-tice groups and health systems. Humana, Cigna and WellPoint have made purchases of physi-cian groups, clinics and post-acute care provid-ers over the past few years. Insurers including UnitedHealth Group, Aetna and Blue Cross have also purchased technology companies that create health information exchanges and facili-tate electronic health record conversion, among other things.

As an alternative to outright purchase, partner-ship is also growing in popularity. One recent ex-ample is UnitedHealthcare and North Shore-LIJ Health System’s collaboration to offer several tiered benefit plans designed to address account-able care concepts.

Some providers are also working to offer their own insurance plans, making up an estimated 20 percent of networks that market an insurance product, according to a Washington Post article. Steward Health Care, a hospital chain based in Boston, began offering its own health insurance plan that will be 20 percent to 30 percent below market rates and cover treatment only in its own hospitals. And in Minnesota, Medica, a health insurer, and Fairview Health Services teamed up to form an ACO offering a health plan that will pay for services only in Fairview’s seven hospi-tals and 350 clinics.

And this trend is not limited to just hospitals or insurers. For example, kidney dialysis giant DaVita paid approximately $4.4 billion to ac-quire HealthCare Partners, the country’s largest operator of medical groups and physician net-works with more than 8,300 physicians, in an effort to persuade the government that it can manage all its kidney patients’ health needs, not just their dialysis.

4 partnership optionsFrom the health executive’s perspective, deciding which partnership approach is most attractive is not a simple, clear-cut endeavor, since each mar-ket is unique and each partner is different. The value proposition must be apparent to all par-ties, though the market strategies a provider can pursue may be impacted by the payor with which the provider is partnering. Choosing a partner, deciding on the best partnership model and pri-oritizing among market opportunities must all occur together.

Many hospitals and health systems are expanding their range of services beyond the operation of hospitals to function more as integrated networks that provide a broad array of offerings, includ-ing a mix of outpatient and post-acute services in addition to the services traditionally offered by hospital systems. Providers that operate as net-works can capture revenue sources from a diverse group of patients, changing their patient mix to add those who need less hospital care. This is es-sential in an environment that is focused on cost-containment and changing care delivery models (e.g., preventive, palliative and chronic care). Health executives should be looking for this kind of expansion whenever possible.

As hospitals and health systems look to the fu-ture, there are a number of strategic options worth exploring:

1. Create a health plan. Providers may want to consider offering their own health plan if they can incorporate a large enough patient base to sufficiently spread the risk and have the capital resources to develop and fund a product. Un-der the old fee-for-service model, physicians and hospitals were incented to grow volumes of patients to admit, perform a test or procedure, etc. New payment schemes are experimenting with economically sustainable ways of keeping patients out of the hospital. Offering a health plan will help health systems align their interests with those of partnering physicians and enable hospitals and affiliated physicians to share in the value created by reducing costs and improving outcomes, helping offset the inevitable declines in hospital utilization.

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47Executive Briefing: Partnership Opportunities to Meet Reform’s Demands

2. Forge an insurer partnership. Hospi-tals and health systems with less risk tolerance or fewer financial reserves can forge relationships with insurers that incent covered patients to be treated in their hospitals or outpatient facilities. Physician networks are required to define and implement care models that focus on improving quality and managing costs and utilization. Pro-viders face a trade-off here: For the opportunity of becoming the hospital or facility of choice for subscribers of the insurance plan, the health sys-tem must work with the insurer on acceptable fi-nancial terms. These types of funds-flow analyses are often foreign to health systems. However, the opportunity to share value created by effectively managing a patient population can be significant.

Kaleida Health of Buffalo and HealthNow (Blue Cross Blue Shield of Western New York) re-cently announced plans to form a physician-led network aimed at improving care coordination, reducing duplication and improving quality. We are likely to see this type of partnership growing in popularity, though it requires a common vi-sion and a great deal of trust between all parties, as well as clear articulation of mutual objectives.

3. Develop an accountable care strate-gy. Pursuant to the Affordable Care Act, several accountable care organizations have been set up to serve Medicare and commercial patients. Un-der the terms of these types of organizations, providers agree to meet certain quality standards in caring for a group of patients. If the partners achieve a savings greater than a certain percent-age compared with what would have been spent for the same patients in a fee-for-service model, they are rewarded with a share of the savings by the insurance company. Many insurers are join-ing with providers to set up commercial, or non-Medicare, ACOs. One such ACO, AdvocateC-are, was started last year in an alliance between Blue Cross Blue Shield of Illinois and Advocate Health Care of Chicago. After six months of providing care to 750,000 members, results sug-gest the effort is enjoying some success — at least when it comes to utilization. In the first six months of 2011, hospital admissions were 10.6 percent below the same period in 2010, and emergency room visits were down 5.4 percent.

While developing an ACO has certainly received the bulk of the press, it does not have to be the end goal for all provider systems. Rather, we suggest creating a strategy related to caring for populations based on outcomes. Many organiza-tions have focused on creating bundled payment strategies (e.g., Henry Ford, Cleveland Clinic) and developing strategic relationships with other regional providers (e.g., Froedtert Health).

4. Carve out an insurance product to of-fer. Hospitals and health systems can negotiate with insurers to offer specific services tailored to certain groups of patients whose care the provid-er would manage for a negotiated fee. In the past,

these kinds of carve-outs were used by insurers to manage behavioral health and substance-abuse services. In today’s environment, some providers may want to think bigger by setting up compre-hensive programs for chronic-care patients with diabetes or heart disease. This may appeal to in-surers who want to eliminate a layer of contracted care managers who come between them and hos-pitals and skim off some of their revenue.

Key ConsiderationsAs health executives weigh their options and make choices about the types of alliances and partner-

ships they want to form, they need to carefully assess their position and the positions of other players in the markets in which they operate.

Market expansion opportunities. The po-tential partners available to hospitals and health systems are largely dependent on local market dynamics, including respective market penetra-tion and the types of populations served. Health executives should seek partnerships with payors and/or physician groups that will lead to incre-mental growth opportunities and that have com-plementary strengths.

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48 Executive Briefing: Partnership Opportunities to Meet Reform’s Demands

Resources and risk sharing. In order for partnerships to flourish, each organization has to be committed to its success and able to de-vote sufficient staff and resources to leverage

the full value of the collaboration. This requires transparent information-sharing and a clear understanding of the risks. Deeper integration holds the promise of greater potential cost sav-

ings and patient care management, but it also in-creases the level of risk in the partnership.

Capturing created value. It is one thing to create patient value through improved clinical outcomes and reduced costs. It is quite anoth-er to capture that created value. Hospitals and health systems forging relationships with insur-ers will need to ensure the risk they assume in a newly formed relationship is commensurate with the financial benefits when they meet their agreed-upon targets. Providers must take cau-tion that they do not enter into a relationship that leaves them overly vulnerable to downside risks and provides little upside benefit.

Market response. Organizations seeking a partnership have to anticipate the likely respons-es from the community and from competitors left out of an arrangement. In highly consoli-dated markets, collaboration between two large players risks raising accusations of anti-compet-itive behavior. Even if no legal action is taken, which is rare, this can still be a distraction from achieving cost savings and improving patient care coordination.

ConclusionIt is our belief that market forces and federal and state policies will continue to push provider organizations to make deals and forge alliances with health insurers and physicians as they strive to make cost-containment efforts viable for their bottom line. In this environment of rapid change, health executives need to be nimble and prepared to act quickly and decisively as they consider new partnerships with insurers and physicians lest they risk erosion of their position along with their bottom line. n

Rob Langheim and Anne Vars advise the nation’s lead-ing hospitals and health systems on their strategic chal-lenges. Rob Langheim and Anne Vars can be reached at [email protected] and [email protected].

KurtSalmonistheconsultingfirmforhealthcareorganizationsthatrefusetocompromisebetweenmissionandbusinesssuccess.Wepartnerwithclientstocreateuniquelyrelevanthealth care organizations that transform care delivery for the 21st century. Learn more at www.kurtsalmon.com.


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50 Transaction & Valuation Issues

Supreme Court justices sided with the Federal Trade Commission today with a unanimous ruling that lower courts improperly dis-missed antitrust complaints over Albany, Ga.-based Phoebe Put-

ney Memorial Hospital’s acquisition of Palmyra Medical Center in Albany.

The case centers around a $195 million transaction and the application of state action immunity, or whether states can execute hospital mergers and acquisitions despite FTC scrutiny if a state action doctrine gives local government entities power to acquire hospitals.

The Supreme Court reversed a December 2011 decision from the Atlanta-based U.S. Court of Appeals for the Eleventh Circuit, which approved the hospital merger even though the court anticipated monopolistic effects. That court based its decision on a 1941 Georgia law, or state action doc-trine, which allows hospital authorities to acquire hospitals by purchase, lease or other means.

Justice Sonia Sotomayor delivered the court’s opinion today. The court ruled that “because Georgia’s grant of general corporate powers to hospi-tal authorities does not include permission to use those powers anticom-petitively, we hold that the clear-articulation test is not satisfied and state-action immunity does not apply.”

The clear-articulation test refers to an assessment of whether the state clearly articulated and affirmatively expressed permission for hospital authorities to make acquisitions that would “substantially lessen” competition.

“Our case law makes clear that state-law authority to act is insufficient to establish state-action immunity; the substate governmental entity must also show that it has been delegated authority to act or regulate anticompeti-tively,” the court ruled. n

Supreme Court Sides With FTC in Phoebe Putney CaseBy Molly Gamble

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52 Health Information Technology

Only 1.8% of Hospitals Are Paperless With a Full EMR By Kathleen Roney

Less than two percent of hospitals in the United States are paper-less, meaning they have a complete electronic medical record, ac-cording to data from HIMSS’ Electronic Medical Record Adop-

tion Model.

The EMRAM is an eight-step process that allows hospitals to track their progress toward meaningful use of certified EMR technology.

Stage 7 under the EMRAM means a hospital has a complete EMR, the ability to share data, data warehousing and data continuity with its emer-gency department, ambulatory and outpatient settings. However, only 1.8 percent of hospitals had reached this stage in the third quarter of 2012. Just over 7 percent of hospitals fall in stage 6 under the EMRAM model, meaning they have physician documentation, a full clinical deci-sion support system with variance and compliance and a full radiology picture archiving and communication system. Despite these low levels, the number of hospitals that reached stage 5 or stage 6 increased by more than 80 percent in 2011, and the amount of hospitals achieving stage 7 increased by 63 percent.

The majority of hospitals — 41.3 percent— fall in stage 3. Stage 3 means the hospital’s EMR has nursing/clinical documentation (flow sheets), a clinical decision support system with error checking and a picture ar-chiving and communication system outside of radiology.

In 2015, hospitals and other eligible providers will have to demonstrate meaningful use of certified EMR technology to avoid penalties by Medi-care. n

Report: More Than Half of Data Breaches Since 2009 Resulted From Theft, LossBy Anuja Vaidya

Over half the breaches of protected patient information, reported to the HHS since 2009, have been a result of theft or loss, ac-cording to a report called “Breach Report 2012, Protected Health In-

formation,” by Redspin, an IT Security and consulting company.

The report examined the 538 large breaches of protected health informa-tion affecting over 21.4 million patient records that have been reported to the HHS since the interim breach notification rule went into effect in 2009, as a part of the Health Information Technology for Economic and Clinical Health Act.

Other key findings of the report are:

• There was a 21 percent increase in the number of large breaches in 2012 as compared to 2011, but a 77 percent decrease in the number of patient records impacted.

• Fifty-seven percent of all patient records breached involved a “busi-ness associate,” a third-party vendor that needs access to the pro-tected health information to provide their services.

• Thirty-eight percent of incidents were a result of an unencrypted laptop or other portable electronic devices.

• The largest breach incident of 2012 resulted in 780,000 records be-ing affected. n

Cerner, Epic Rate Highest in ICD-10 Preparedness, According to ProvidersBy Anuja Vaidya

A new report called “ICD-10 Perception 2012: Can Technology Relieve Readiness Is-sues?” by KLAS, a healthcare research

firm, reveals that providers rated electronic medical record vendors Cerner, Epic and Sie-mens highest in their ICD-10 preparedness, while Allscripts and MEDITECH were rated the lowest, according to a news release by KLAS.

The report discusses how leading providers are utilizing third-party consulting firms to help them overcome ICD-10 challenges. It also re-veals that computer-assisted coding is among the technologies that providers are using for the ICD-10 transition. A majority of the market is looking to 3M for computer-assisted coding.

The report is the second of a two-part series. The first part of the series called “ICD-10 Con-sulting: Roadmap to a Successful Transition,” was re-leased Dec. 3, 2012. The report found that 84 percent of providers had engaged a consulting firm for ICD-10 roadmap/gap analysis. n


There isn’t a trusted scorecard to accurately assess a healthcare CEO’s performance. But there are a handful of skills the most

remarkable leaders know and demonstrate ev-ery day in the C-suite. Quint Studer, founder of Studer Group, says he’s observed five skills and abilities that the most effective hospital and health system CEOs predictably demonstrate.

1. Extraordinary CEOs objectively diag-nose the organization’s ailments. The ability to properly identify and assess problems is the foundation of healthcare. Much like physi-cians and other healthcare professionals, CEOs are expected to properly diagnose the “illness” before they can apply the “cure.”

The best hospital and health system CEOs ob-jectively identify problems within their organiza-tions and constantly push employees to improve or maintain top performance. Why isn’t this a habit among all CEOs? Proximity and poor esti-mation, says Mr. Studer.

“Leaders can sometimes be ‘too close’ to the organization to objectively assess its perfor-mance,” he says. “As a result, they’ll overestimate and think their leadership and the hospital’s per-formance is better than it is.”

For example, in a recent Studer Group sur-vey based on responses from more than 300 hospital and health system CEOs, a number of leaders identified clinical quality of care as their organization’s number one strength. Upon closer inspection of those organizations’ quality metrics and information, Studer Group found many of those CEOs had overestimated their clinical performance.

Such overconfidence is fairly common among CEOs, he says, and it’s a major flaw that will wreak havoc throughout the hospital or system. “Top CEOs have a responsibility to objectively self-assess themselves and their organization,” says Mr. Studer. “That’s critical.”

2. They drive variability out of leader-ship. Much has been written about variation within healthcare delivery and clinical care, but variability within management and administra-tion has received far less scrutiny. That’s too bad, says Mr. Studer, as leadership inconsistencies at any level can harm employee morale, turnover, talent selection and hiring.

“When we ask CEOs to evaluate their senior leadership teams, we ask them to measure con-sistency in system-wide leadership practices on

a scale of one to 10,” he explains. “The aver-age we see is a 5.5. We recommend CEOs and senior leaders sit down and decide which leader-ship practices are absolutely mandatory — and then, standardize them.”

One common problem? Meetings. “There are too many meetings that are too long and not well-organized,” says Mr. Studer. “Yet, despite these problems, most leaders do not follow meeting templates or agendas. When inconsis-tencies like this linger at the top of the organiza-tion, they tend to trickle down throughout the rest of the hospital or system.”

What’s more, a single executive who strays from standardized procedures can hold the entire or-ganization back. Mr. Studer says he worked with 11 executives at an organization that wanted to reduce its turnover. Even though turnover de-creased and stabilized, the rate was still higher than what the organization set out to reach. “When we dug into it, we found we had one senior leader who didn’t follow the new pro-gram,” says Mr. Studer. “The turnover rate stag-nated because that senior leader wasn’t following agreed-upon practices.”

3. They align their outlook with their organization’s outlook. Say you called 20 hospital CEOs and another 20 hospital man-agers, supervisors and directors and asked these two groups, “Will the healthcare envi-ronment in the next five years be very diffi-cult, difficult, the same, easy or very easy?” Mr. Studer says most CEOs and executive team members respond with “very difficult” to “difficult,” while managers are more likely to say “difficult” to “the same.”

CEOs and managers have different responsibili-ties and workloads, so it is to be expected that their outlooks will not match. Yet, this gap in urgency can ultimately make an organization fail. Narrowing this gap comes down to how well CEOs communicate the pressures their organi-zations face in the moment, as well as those that are on the way.

“CEOs must communicate the healthcare envi-ronment to every stakeholder so they can align their sense of urgency,” he says. “You can’t be successful if four out of 10 leaders aren’t willing to change.”

4. They don’t underestimate how change affects employees. Recently, Mr. Studer visited a hospital that was constructing a new multi-million-dollar facility on its campus.

He noted how closely hospital management followed the construction process and tracked its progress. Yet very rarely is such steady and detailed attention paid to changes or initiatives among employees, he points out.

“We micromanage construction projects but we don’t micromanage human processes,” says Mr. Studer. “That’s a mistake, because human change is the key to everything.”

Mr. Studer describes four categories of employ-ees. First are the unconsciously incompetent, or those who don’t know what they don’t know. Then there are the consciously incompetent, or people who know what they don’t know; followed by the consciously competent, who are beginning to master the process; and finally the unconsciously competent. Processes come naturally to this last group. They can cook a dish without looking at the recipe.

A major misunderstanding in healthcare man-agement is to assume the organization’s high performers, or the unconsciously competent employees, will have the easiest time changing their processes. The best CEOs know this is not so.

“High performers have been doing that process for such a long time, it’s become a habit,” says Mr. Studer. “They already feel successful, so what they don’t want to do is go backwards and feel like they’re starting over. CEOs can underes-timate how hard a change will be, even for high performers.”

This dynamic can explain why a hospital’s top-

5 Things the Most Extraordinary Hospital CEOs DoBy Molly Gamble


performing physicians may have such a difficult time adjusting their workflow or working with new electronic medical record software, for in-stance. The four categories also apply to execu-tives, and Mr. Studer says CEOs can apply the same test to their senior management team to de-termine how each member might react to change.

The most remarkable leaders in healthcare un-derstand the complexity involved in change and take it very seriously, adds Mr. Studer.

5. They consistently manage employee performance. By communicating and up-holding clear expectations for direct reports, CEOs can drive a culture of accountability that permeates the entire organization. Tolerating

low performers is a fatal flaw for all organiza-tions, but especially for those in healthcare that hold patients’ lives in their hands. And along with their ethical obligation to patients, hospitals should address low performers so they do not bring other employees down.

“When we do surveys, we typically find that 8 percent of the people in an organization are not meeting performance expectations,” says Mr. Studer. “And 50 percent of that group are not in any performance counseling. There is no documentation in their file showing any form of corrective or disciplinary action.”

Incidentally, Studer Group studies have found organizations with leaders who report a high

number of low-performing employees also have lower HCAHPS scores.

Part of creating a highly reliable organization is consistently addressing low performance, from the senior level team to hospital staff. The best CEOs uphold the value of accountability to drive performance management throughout the organization.

“These five things not only set a CEO apart from the rest in terms of leadership and vision, but also make our hospitals and health systems safer, financially stronger and more able to quickly respond to the changes facing today’s healthcare industry,” says Mr. Studer. n

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55Executive Briefing: Physician Engagement

6 Tips to Engage, Retain and Recruit PhysiciansBy Jim McLaughlin

A hospital is only as good as the care it provides, and no hospital renders quality care to a patient without the leadership of a quality physician. However, the current and predicted 20 percent physi-

cian shortage in the next two decades has created a competitive market and a daunting task for hospitals to retain their quality physicians. With hospi-tals willing to spend as much as $150,000 to recruit a physician, retaining them becomes paramount. As hospital executives have been charged with leading their system into the new era of healthcare reform, it’s no small balancing act to keep physicians productive, engaged and retained.

Randal Dabbs, MD, FACEP, FAAFP, president of practice development at Knoxville, Tenn.-based physician management firm TeamHealth, saw many of the problems hospital executives faced in managing their emer-gency staff during his 30-year career as a physician executive and 17 years as chief of emergency services at the University of Tennessee Medical Center in Knoxville. In 1979, he and two other physicians co-founded Southeastern Emergency Physicians, now TeamHealth, to manage staffing and to develop ER physicians for their client hospitals. He says a benefit in outsourcing physician management is that it allows hospital executives to focus on running their organization, allowing TeamHealth to manage the recruiting, staffing and continuous training of physicians using best practices learned from contracting with 4,700 providers across the country.

“Most hospital C-suites have minimal experience in managing ER physi-cians or know the standards of care in that specialty,” Dr. Dabbs says. “Also, if a hospital contracts with a hospital-based physician, there are challenges of alignment and accountability. Today, hospitals are reimbursed via ‘value based purchasing’ and achieving high levels of patient satisfaction scores of their physicians is critical to their survival. If the hospital is employing that physician, it can be difficult to coach up or terminate a physician who does not play well in the sandbox,” he says. Holding physicians account-able requires leadership training, and coaching them up can be a challenge.

The key to addressing retention, productivity and clinical quality simultane-ously, Dr. Dabbs says, is physician engagement, which will usually boost patient satisfaction scores as well. Physicians who are part of a cohesive, like-minded team want to stay, and they attract other like-minded physi-cians as well, easing hospitals’ burden of recruiting suitable candidates as replacements.

Here are Dr. Dabbs’ recommendations for hospitals to promote physician engagement, in what he calls his “6 C’s of retention.”

1. Create a positive culture by the physician leader. “For Team-Health, the medical director is the lynchpin,” Dr. Dabbs says. While an organization’s culture may start at the CEO level, medical directors, as phy-sician role models, carry special authority among other physicians. “Physi-cians do not always follow non-physicians as leaders,” he said. TeamHealth relies heavily on its medical directors to manage the contract at the facility level. The company invests heavily in their training to teach them how to

understand the needs of the C-suite and how to achieve efficient integra-tion with other service lines such as hospital medicine and anesthesia.

2. Communicate. “Looping in physicians across your system promotes a sense of community, helps brand the organization from the inside and creates a forum for all providers to address issues that are important to them,” Dr. Dabbs says. On the annual survey sent to TeamHealth phy-sicians, the most common request is for more communication with the organization’s leadership and with their own hospitals, Dr. Dabbs’ says. That feedback led TeamHealth leadership to send weekly updates to their providers as well as a corporate “State of the Organization” video link, email listservs and town hall meetings. This gives physicians a voice and helps them be more connected, which in turn, encourages them to stay put.

3. Connect or “round”. “You’d be surprised how few CEOs get out of the C-suite to speak or round on their caregivers within the hospital,” Dr. Dabbs says. “Walk the halls of the hospital, get to know people by their first names and ask how you can make their work more enjoyable. When I think of past great administrators, they did that,” he says. He said re-search shows staff morale and engagement is higher when bosses talk to all members regularly, communicate directly and build personal connections. “Even if they are not perfect, they’ll want to get there,” he adds.

4. Compliment. Great things happen in a hospital every day by physi-cians, nurses, and even cafeteria and housekeeping personnel, but most go unnoticed or are seen as routine. The leader of a team must search for and compliment these deeds openly and with thank-you cards. This increases engagement and reinforces that type of behavior. There is no level of lead-ership that should not practice this strategy.

5. Coach. Perhaps the hardest piece of the puzzle for executives is whether, when and how to coach a low-performing physician. It may ini-tially seem easier to simply “fire” the doctor, but the shortage of qualified candidates increases the importance of retention by good coaching. Again, this is why medical directors trained in this art are critical. Low performers can breed resentment among physicians who view them as a weak link, but terminating them without investing in their development can grow the same negativity. Treat your physicians as servants, commodities or vendors, Dr. Dabbs says, and you will retain neither the good nor the bad.

Coaching itself is a skill that must be taught to medical directors. At Team-Health, Dr. Dabbs says they’ve recruited one of the top physician coaches in the country, giving him the primary job of teaching physician leaders how to coach up their middle-to low-performers.

“Physicians are trained to be solo practitioners, and while we inherently want to practice sound evidence-based medicine, we don’t always know how to work effectively in a large organization. We are more likely to be engaged with our next patient than with the organization as a whole,” said Dr. Dabbs.

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Physician turnover comes with steep � nancial costs and plummeting staff morale. TeamHealth, one of the nation’s largest providers of clinical outsourcing for multiple hospital-based services, has an industry leading physician retention rate of 94 percent. Our reputation, extensive resources, and programs helpour providers succeed — that’s why we’ve become the practice of choice for providers. Our newest program, Providers for LifeTM, promotes recruitment, retention, and job satisfaction of physicians and other health care personnel. This proactive approach helps us avoid physician burnout and promotes job satisfaction. Call us today to see how we can help you build and retain a team of productive and engaged physicians for your hospital.

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58 Executive Briefing: Physician Engagement

6. Claims reduction. One of the greatest sources of stress for health systems and physicians alike is the fear of being sued. Rarely does one get sued without the other. Dr. Dabbs says this stress can be alleviated with robust training in risk management which builds con-fidence in physicians as they do their work more efficiently and with less second-guessing. He says TeamHealth has a very comprehensive risk management program that is well-informed from the 10 million patients they care for each year. “We have a great database and can find trends through our accredited Patient Safety Organization. And if we

find troublesome trends, we’re able to provide feedback to physicians using evidence-based medicine, with decreased worry about being sued. I would suggest any hospital develop a quality improvement program that seeks to educate and support the physician, instead of seeking to reprimand and ostracize him or her.”

Hospitals’ physician payrolls are huge expenses, which makes developing and retaining them all the more essential for a hospital to prevent incurring unneeded costs and weakening its clinical culture. n

An annual survey that examines the level of physician engagement at U.S. hos-pitals has reported a slight decline in

overall physician engagement levels.

“The State of Staff Physician Engagement: 2011 in Review,” the most recent data available, found that in 2011, physician engagement was 4.12 on a five-point scale, compared with the 2010 aver-age of 4.17. A score of one denotes the a physi-cian “strongly disagrees,” while a score of five denotes the physician “strongly agrees” with a statement. Thus, the higher the score, the more positive the response. Information is based on an analysis of more than 1.4 million survey re-sponses from physicians in 2011.

Here are some key findings from the 2011 sur-vey, including survey items physicians rated highest and lowest.

Physician engagement1. This hospital makes every effort to deliver safe, error-free care to patients: 4.19

2. Overall, this hospital provides high-quality care and service: 4.23

3. I would recommend this hospital to other physicians as a good place to practice medicine: 4.06

4. I would recommend this hospital to family and friends who need care: 4.24

5. I am satisfied with the overall performance of hospital administration: 3.54

6. This hospital treats physicians with respect: 3.83

7. I have confidence this organization will be successful in the coming years: 4.21

8. If I am practicing medicine three years from now, I am confident that I will be practicing at this hospital: 3.94

9. Overall, I am satisfied with this hospital: 4.05

Highest-scoring items from the survey10. The nursing staff at this hospital is commit-ted to providing compassionate care: 4.28

11. This organization cares about its customers: 4.27

12. This organization conducts business in an ethical manner: 4.24

13. This organization is respected in the com-munity: 4.21

14. I have confidence that this organization will be successful in the coming years: 4.21

Lowest -scoring items from the survey15. I am satisfied with Ambulatory Services’ ef-ficiency: 3.09

16. I have adequate input into decision affecting my medical practice: 3.30

17. Senior management is responsive to physi-cian feedback: 3.37

18. I am satisfied with the ease of the scheduling process for my patients: 3.43

19. I can easily communicate my ideas and con-cerns to senior management: 3.46

20. The amount of job stress I feel is reasonable: 3.45 n

Physician Engagement: 20 Survey FindingsBy Molly Gamble

TeamHealthisoneofthelargestsuppliersofoutsourcedhealthcareprofessionalstaffingandadministrativeservicestohospitalsandotherhealthcaregroupsintheUnitedStates.Foundedbyemergencyphysiciansin1979,TeamHealthremainsaphysician-led,patient-focused organization committed to strengthening hospitals, supporting physicians and improving healthcare through high-quality man-agement,staffingandsupportservices.TeamHealth’smorethan5,600affiliatedhealthcareprofessionalsprovideemergencymedi-cine,hospitalmedicine,anesthesiaandpediatricstaffingandmanagementservicestomorethan540civilianandmilitaryhospitals,clinics, and physician groups in 45 states.

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Cost Reduction | Margin Improvement | Quality Improvement

60 Chuck Lauer

Trust plays an enormous role in our lives. We have to trust people in just about everything we do. There are simple, ev-

eryday situations, like trusting your mechanic to fix you car in time, so that you to drive it to work the next day. And there are more critical situ-ations, like trusting the pharmacist to fill your prescription properly, or trusting the surgical team to make sure you don’t get an infection.

We are constantly keeping our fingers crossed that everyone we trust will do what we expect them to do. This is particularly true for execu-tives who depend on large numbers of people to get things done. In a recent survey of corporate executives by Partners in Leadership, 79 percent said teamwork and trust constituted a major or-ganizational challenge. They agreed that when trust falls apart, it leads to mistakes that might not be fixable.

Trust in teamworkTrust is a critical issue in healthcare right now, because we are putting much more emphasis on teamwork. This involves clinical caregivers, the rest of the hospital staff and a growing list of affiliated organizations outside the hospital, con-tracted through accountable care organizations and the like. All of these people have to work together closely and learn to trust each other.

At a recent meeting I attended, a panelist spoke on the critical role of trust in making a hospital function efficiently and effectively. When that trust erodes, patient care gets screwed up. He gave an example of a hospitalist and ER physi-cian having a falling-out over a patient handoff.

The seeds of this conflict derive from the differ-ing roles of these two specialties. The emergen-cy physician is focusing on immediate needs and how to stabilize the patient, whereas the hospi-talist is trying to provide a definitive diagnosis for the long term. But these differences should be augmenting each other, not creating conflicts where big egos get in the way of delivering qual-ity care.

In this particular situation, the hospitalist doubted the ER physician’s diagnosis. He told the emergency physician he was going to “think about it” and would get back to him about ad-mitting the patient. The emergency physician smoldered over the hospitalist’s lack of trust in his diagnosis, and all the while, care for the pa-tient had to wait.

Trust is so critical that the amount you have in a person can trump all the skills and abilities that person has. On my high school football team in

Buffalo, N.Y., there was a halfback who looked every inch the football player; he had plenty of natural ability, but he couldn’t follow through on assignments. If the quarterback told him to run into a certain hole, he might run the wrong way. You could never be sure what he’d do. Even though he had great talents, no one could trust him, so he ended up sitting on the bench.

Trust is also impaired when promises are con-tinually broken or a lot of obvious mistakes are made. When you no longer trust another person, you have to double check their work all the time, and you can’t rely on what they say. This eats away at efficiency and endangers quality of care.

In organizations like the United States Marine Corps and all the other branches of the military, trust is indispensible. Soldiers are trained to sup-port each other, no matter what. There can’t be any room for large egos or selfishness.

When police officers are in a standoff with an armed and dangerous fugitive, they’ll say to each other, “I’ve got your back.” They’ll be there if something goes wrong. “All for one, one for all” is how the Three Musketeers put it. That should be the motto of any organization that strives to be successful.

And yet hospitals have the persistent problem of “silos” — entrenched groups that don’t work well with each other. Physicians may form silos against management, nurses against physicians and whole departments may feud with one an-other like the Hatfields and McCoys. There should be no allowance for turf and ego in any healthcare organization. A hospital needs to be a refuge of comfort and security, not a hotbed of conflicts and simmering rivalries.

Ultimately, these problems end up at the CEO’s door. Chief executives set the tone for the hos-pital. If they let this behavior get out of hand, it will destroy the efficiency of the institution and completely jeopardize patient safety.

This all gets to the main mission of a health-care organization, which is winning the trust of patients. The patient’s opinion of the institution is becoming even more important with new re-quirements like the HCAHPS patient satisfac-tion surveys for Medicare. But winning patients’ trust involves much more than just hitting all the right metrics. You have to have it in your blood.

Earning and maintaining the public’s trust makes all the difference between a good organization and a great one, according to David A. Shore, founding director of the Trust Initiative at the

Harvard School of Public Health. “A good orga-nization produces excellent programs, products and services,” he writes. “A great one — with a power brand — is trusted to consistently deliver excellent programs, products and services.”

Unfortunately, the public’s trust in hospitals and other medical institutions has declined in the past half century. According to Harris Polls, 73 percent of Americans expressed a “great deal of confidence” in medical institutions in 1966, but that number had dropped to 32 percent by 2004.

For the patient, trust is everything. Alice K. Ja-cobs, MD, a former president of the American Heart Association put it this way: “Trust has been shown to be essential to patients, in their willingness to seek care, their willingness to re-veal sensitive information, their willingness to submit to treatment and their willingness to fol-low recommendations.”

Winning back the public’s trust has a lot to do with assuring a high level of trust among all the people within your organization. It’s a trag-edy every time a patient who needs care can’t be admitted because of some feud between a hospitalist and an emergency physician. Patients should be assured that the people they go to for comfort and aid are focused on them, and not on some bureaucratic nonsense. We can do bet-ter than that! n

Chuck Lauer ([email protected]) was publisher of Modern Healthcare for 33 years. He is now an author, public speaker and career coach who is in demand for his motivational messages to top companies nationwide.

Trust By Chuck Lauer, Former Publisher of Modern Healthcare and an Author, Public Speaker and Career Coach


Physicians play a critical role in quality improvement at hospitals and health systems. Incentivizing physicians to im-

prove quality and help meet the organization’s goals is essential to a hospital’s and health sys-tem’s success in enhancing performance.

Educate physicians that accountability for quality is happening nowFirst and foremost, incentivizing physicians to engage in quality improvement needs to begin with education and definition of the new real-ity. It’s important for hospitals/health systems to make sure physicians are aware of the state of healthcare quality across the country and the new requirements for quality and patient safety, clinical documentation, billing, coding and reimbursement practices as well as the or-ganization’s quality-related goals so physicians can become part and parcel of these efforts. Fortunately, there are some physicians, as in any cohort, who truly understand and become champions of quality. There are others who feel they already do a quality job, have noth-ing else to learn and believe quality really is the health system’s issue. Hospitals have to make sure physicians understand the healthcare in-dustry’s quality focus is here to stay in a very meaningful way and will change significantly how physicians will be paid and held account-able for their work. This is where we will move from volume of work done to value of the work product.

One of the challenges is that there’s been a lot of discussion and rhetoric about improving quality for a very long time, but it hasn’t really impacted the physicians directly in a meaningful way until now. It is extremely important to make sure physicians understand that accountability for care in a high-quality, low-cost manner has finally become a reality.

Data analytics sparks competitive natureIncentivizing physicians also requires hospitals and health systems provide dependable data analytics to physicians so they understand their work product better. Comparing data on their performance to their peers’ performance is a great motivating force for physicians, because by nature they are very competitive and don’t like to not be in the top tier of performance.

However, it’s important that hospitals and health systems not only give physicians data once in a while in an ad-hoc manner, but ensure that there’s a good feedback loop for giving them data as close to real time as possible. That data should be relevant and meaningful to the physi-cians and tie back to their goals and the goals of the system so that they may utilize the data to continuously improve their practice. For ex-ample, Mercy physicians can access data via a program called Crimson, which is part of the Advisory Board Company. Crimson provides a significant amount of quality process improve-ment, financial and clinical data to physicians.

Through this program, we’re educating physi-cians and giving them access to their own data in real time. They don’t have to be dependent on us to provide data, but can analyze their data them-selves and learn from it. They can understand how they’re performing relative to not only their own cohorts but also relative to their own specialty across hospitals in the database and relative to national benchmarks. This is a great learning tool that also generates questions and dialogue among physicians, between chiefs of staff and chairs of departments and the mem-bers of the departments. Crimson data is avail-able in the ambulatory setting as well. This is just one example of the various tools out there that can do the same type of reporting for systems.

We’ve also just invested in another database called Explorys that is available in ambulatory practices. It downloads data from our electronic health record every 24 hours, so our physicians have access to their performance data relative to their group, to their specialty, to the cohort and national quality benchmarks.

We see the ability to compare performance data as a great incentive and motivating force for phy-sicians to improve their performance.

You can’t improve what you can’t measure and share with those who need to improve it.

Leadership positions and engagement motivate physiciansAnother strategy to incentivize physicians is giving them leadership positions within quality to help engage them in dialogue, design, implementation, measurement, peer engagement and execution. Traditionally we have had physicians as chairs of a department, chiefs of staff and chief medical

officers. That’s great; but, I think physicians also need to move into a chief quality role, both in a formal and an informal leadership capacity

When physicians lead quality initiatives, the projects aren’t looked upon as something the administration is telling physicians to do, but rather as something physicians tackle with their peers. At Mercy, we have physician quality teams in the hospital and on the ambulatory side look-ing at quality and providing feedback. Develop-ing teams of physicians that review data and give feedback helps significantly in moving the quality agenda forward. Physicians at Mercy are engaged in every aspect of quality, from gov-ernance to risk management to peer review to development of new quality initiatives that con-tinuously make us the preferred place to practice and take care of patients.

Financial incentives can change behavior Incentives can also be a motivator for physicians. We are using them particularly with those em-ployed by us, by not only compensating for see-ing patients, but for seeing patients and providing high-quality care with a superior care experience. Hospitals’ compensation structures should have clearly defined quality metrics, which may be dif-ferent in primary care compared with specialty practice. For example, in primary care there are specific quality metrics built into patient-cen-tered medical homes that we have embarked on and will significantly impact the care and access provided to our patients. Additionally, the met-

Incentivizing Physicians for Quality Through Data, Compensation and Cultural RedefinitionBy Imran Andrabi, MD, Senior Vice President and Chief Physician Executive Officer, Mercy


A letter of intent to affiliate Medford, Ore.-based Asante and Ashland (Ore.) Commu-nity Hospital was unanimously approved by the Ashland City Council, paving the way for a planned merger.

Bamberg County officials in South Carolina are helping to appraise the assets of the shuttered and bankrupt Bamberg County Hospital in prepa-ration for a proposed buyout by Nashville, Tenn.-based Hospital Corporation of America.

Providence, R.I.-based Care New England Health System and Memorial Hospital of Rhode Island in Pawtucket filed their affilia-tion agreement and other requisite application materials with the Rhode Island Department of Health, the state attorney general’s office and the Federal Trade Commission.

Central Maine HealthCare based in Lewiston has requested a suspension, up to 12 months, on its application to acquire Brunswick, Maine-based Parkview Adventist Medical Center, citing its need to complete a feasibility study of Parkview’s services.

Clifton-Fine Hospital in Star Lake, N.Y., an-nounced it would affiliate with Samaritan Med-ical Center in Watertown, N.Y.

Community Health Network and Wishard-Eskenazi Health, both headquartered in In-dianapolis, announced they have entered into a partnership agreement with approval from the Health & Hospital Corporation of Marion County.

Franklin, Tenn.-based Community Health Systems announced its fourth-quarter profit more than doubled to $62.6 million, and com-pany executives said they plan to expand CHS even further this year with “three to four tar-geted hospital acquisitions.”

The 11th Circuit U.S. Court of Appeals has ruled Naples, Fla.-based Health Management Asso-ciates did not owe restitution to Trinity Hospi-tal of Augusta (Ga.), formerly St. Joseph Hospi-tal, for declining to buy the hospital’s assets after publicly announcing it would in 2005.

Health Management Associates gained ap-proval from the St. Petersburg, Fla., city council to operate Bayfront Medical Center, part of Health Management’s plan to purchase an 80 percent interest in Bayfront Health System.

Kingston, N.Y.-based healthcare system HealthAlliance of the Hudson Valley an-nounced the Benedictine Sisters who have con-trolled Benedictine Hospital, also in Kings-ton, have agreed to drop the hospital’s Catholic affiliation as part of a consolidation effort.

Pittsburgh-based health insurer Highmark moved closer to creating its regional health system after the Orphans’ Court of Allegheny County approved Highmark’s affiliations with West Penn Allegheny Health System in Pitts-burgh and Jefferson Regional Medical Center in Jefferson Hills, Pa.

Chesterfield, Mo.-based health system Mer-cy announced Jefferson Regional Medical

Center in Festus, Mo., agreed to be acquired in a unanimous vote by the board of directors.

New River Medical Center in Monticello, Minn., announced its board of directors have agreed to affiliate formally with St. Cloud, Minn.-based CentraCare Health System.

Ontario, Calif.-based Prime Healthcare Services and Saint Michael’s Medical Center in Newark, N.J., signed a binding asset purchase agreement.

Beleaguered 25-bed Scott County Hospital in Scott City, Kan., was granted a four-week exten-sion to reach a deal with potential purchasing company SM Promen of Tennessee.

Story County Medical Center in Nevada, Iowa, officially affiliated with Iowa Health – Des Moines, a senior affiliate of Iowa Health System.

Akron, Ohio-based Summa Health System and Cincinnati-based Catholic Health Part-ners approved a letter of intent to create a “stra-tegic partnership,” pending final negotiations.

Dallas-based hospital chain Tenet Healthcare entered into a definitive agreement to acquire 209-bed Emanuel Medical Center in Turlock, Calif.

The board of directors at Valley View Region-al Hospital in Ada, Okla., agreed to seek a part-nership with Chesterfield, Mo.-based Mercy.

Wise Regional Health System, based in Deca-tur, Texas, will sell $19 million in bonds as it looks to purchase the bankrupt North Texas Com-munity Hospital in Bridgeport, after it placed the only bid for the hospital for $20 million.

Hospital & Health System Transactions

rics will allow our physicians to practice at the top of their license and be partners in quality finance. On the specialty side, we are in the process of developing specific quality metrics by specialty that compensation will be tied to. Our goal is to ultimately have almost 30 percent of our physicians’ compensation tied to quality and outcomes.

In addition, we need to make sure the quality metrics we’re looking at are aligned with the overall quality goals of the organization and where health-care is moving from a big picture perspective. We have a robust process where we set quality goals on a yearly basis throughout Catholic Health Partners as a system, and then they are cascaded out to each hospital through our board and the medical executive committees to make sure ev-erybody understands the objectives and to align incentives to ensure the best outcomes. The same types of metrics are utilized in the ambulatory setting. As we move to ACOs, clinical integration quality will be measured not only with the component parts of the organization, but across the en-tire organization. In the era of ACOs and bundled payments, quality per-formance standards are a must-have.

Quality-focused cultureWhatever we do to incentivize physicians for quality, we need to do it with a long view in mind. We have to make sure we have the right culture and that through processes and structures we enable people to do the right thing the first time while making it difficult to do something wrong.

Successfully incentivizing physicians to improve quality ultimately depends on having a strong culture of quality. In healthcare, all people who deliver care become part of the quality team. Not only physicians, but nursing staff and ancillary staff embrace the fact that quality is our job; it’s not just delegated to the quality department. Physicians are a piece of it — an im-portant piece — but developing the structure, the mindsets, the focus and the culture is number one. n

Imran Andrabi, MD, serves as senior vice president and chief physician executive of-ficer of Toledo, Ohio-based Mercy, part of Catholic Health Partners. He previously served as president and CEO of Mercy St. Vincent Medical Center in Toledo. He is a diplomat of the American Board of Family Medicine and the American Board of Managed Care Medicine.


Jeff Barber, DrPH, president and CEO of Owensboro (Ky.) Medical Health System, announced plans to retire in July.

Sue Brody, president and CEO of Bayfront Medical Center and Bayfront Health System in St. Petersburg, Fla., announced her resignation.

Worcester-based UMass Memorial Health Care named Eric W. Dickson, MD, MHCM, FACEP, president and CEO.

Cushing Memorial Hospital in Leavenworth, Kan., named Adele Ducha-rme, RN, MSN, MBA, permanent CEO.

Scott Duke, CEO of Glendive (Mont.) Medical Center, resigned to be-come senior vice president of regional operations at Billings (Mont.) Clinic.

Waco, Texas-based Providence Healthcare Network named Brett Esrock, FACHE, MBA, president and CEO.

Nancy Formella, RN, FACHE, was named COO of Beth Israel Deacon-ess Medical Center in Boston.

Louisville, Ky.-based Baptist Health named Stephen C. Hanson president and CEO.

Providence Health & Services, based in Renton, Wash., named Rod Hoch-man, MD, president and CEO, effective July 1.

Parkridge Health System in Chattanooga, Tenn., welcomed Thomas Jack-son as CFO of the Chattanooga market.

J. Thomas Jones, CEO of West Virginia United Health System in Fair-mont, announced plans to retire at the end of the year.

St. Peter’s Hospital in Helena, Mont., named Ann Kjosa, RN, MHM, FACHE, as its new COO and chief experience officer.

Bernard Klein, MD, MBA, the CMO and interim CEO of Providence Holy Cross Medical Center in Mission Hills, Calif., became the hospital’s permanent CEO.

Hunterdon Healthcare System in Flemington, N.J., named Gail Kosyla, MBA, CPA, to serve as CFO.

Wayne Lerner, CEO of Chicago’s Holy Cross Hospital, stepped down.

Debra Linnes was named State College, Pa.-based Mount Nittany Health’s first COO.

Wilmington, Ohio-based Clinton Memorial Hospital Regional Health Sys-tem named Brad Mabry COO.

St. Louis-based BJC HealthCare named Joan Magruder president of St. Louis Children’s Hospital and John Antes president of Missouri Baptist Medical Center in St. Louis.

David Nelson was named CFO of Sacred Heart Hospital in Eau Claire, Wis., and St. Joseph’s Hospital in Chippewa Falls, Wis., both affiliates of Springfield, Ill.-based Hospital Sisters Health System.

Sally Nelson, CEO of Huntsville (Texas) Memorial Hospital, retired and Shannon Brown was named CEO.

Bozeman (Mont.) Deaconess Health Services named Kevin Pitzer presi-dent and CEO.

Hank Porten, president and CEO of Holyoke (Mass.) Medical Center, announced plans to step down this summer.

Hennepin Healthcare System, the public subsidiary corporation of Hen-nepin County that operates Hennepin County Medical Center in Minne-apolis, named Jon Pryor, MD, MBA, as its CEO.

The board of Erlanger Health System in Chattanooga, Tenn., selected Kevin Spiegel as Erlanger’s new CEO.

Joseph Swedish, resigned as president and CEO of Livonia, Mich.-based Trinity Health to become CEO of health insurer WellPoint in Indianapolis.

Jim Taylor, president of University of Louisville (Ky.) Hospital and the James Graham Brown Cancer Center, stepped down and Ken Marshall was named interim president.

SunLink Health Systems, based in Atlanta, terminated the contract of its COO, Ron Turner.

Kent Wallace, president and COO of Nashville, Tenn.-based Vanguard Health Systems, resigned from the for-profit hospital chain

Hospital & Health System Executive Moves

Advertising Index Note: Ad page number(s) given in parentheses

AirStrip Technologies. [email protected] www.airstriptech.com / (210) 805-0444 (p. 15)

AngioScreen. www.angioscreen.com / (866) 782-9432 (p.29)

ASCOA. [email protected] / www.ascoa.com / (866) 982-7262 (p. 31)

athenahealth. [email protected] / www.athenahealth.com/enterprise / (617) 402.8956 (p.3)

Buxton. [email protected] / www.buxtonco.com / 888-2BUXTON (p. 27)

The C/n group. [email protected] / www.thecng.com / (219) 736-2700 (p. 36)

EmCare. www.emcare.com / (800) 362.2731 (p. 11)

EVEIA HEALTH Consulting & Management. [email protected] / www.eveia.com / (425) 657-0494 (p. 19)

The greeley Company. [email protected]/ www.greeley.com / 781-639-1872 x3307 (p.7)

HealthCare Appraisers. [email protected] / www.healthcareappraisers.com / (561) 330-3488 (p. 13)

Healthcare Facilities Accreditation Program. [email protected] / www.hfap.org / (312) 202-8258 (p. 12)

ImageFIRST Healthcare Laundry Specialists. [email protected] /www.imagefirst.com / (800) 932-7472 (p. 14)

Kurt Salmon. www.kurtsalmon.com / (212) 319-9450 (p. 46, 47, 48, 49)

Lumeris. [email protected] / www.lumeris.com / (888) 586-3747 (p. 32, 33, 34, 35)

north American Partners in Anesthesia. [email protected] / www.NAPAanesthesia.com/anesthesia / (516) 945-3333 (p. 37)

northStar Anesthesia. Northstaranethesia.com / (888) 861-3994 (p. 25)

OSg global. [email protected] / www.osgglobal.com / (847) 297-8477 (p. 23)

Principle Valuation. [email protected] / www.principlevaluation.com / (312) 422-1010 (p. 18)

Regent. [email protected] / www.regentsurgicalhealth.com/ (708) 492-0531 (p. 9)

The Sevenex group. [email protected] / www.thesevenexgroup.com / (740) 405-0641 (p.4)

Siemens Medical Solutions, Inc. www.usa.siemens/com/ecoline / (888) 826-9702 (p. 2)

Sound Physicians. [email protected] / www.soundphysicians.com / (800) 850-9665 (p. 51)

Special Pathogens Laboratory. www.specialpathogenslab.com / (877) 775-7284 (p. 10)

TeamHealth. [email protected]/ www.teamhealth.com / (888) 741-7925 (p. 55, 56, 57, 58)

TeleTracking. [email protected] / www.teletracking.com / (800) 331-3603 (p. 45)

TruAcuity. [email protected] / www.truacuity.com / (877) 505-4764 (p. 50)

VHA. www.vha.com / (800) 842-5146 (p. 59)

VMG Health. [email protected] / www.vmghealth.com / (214) 369-4888 (backcover)

Wells Fargo Equipment Finance. [email protected] / Wellsfargo.com/healthcarefinancing / (612) 667-1674 (p. 5)

Wiley. [email protected] / www.leadershipchallenge.com / (866) 888-5159 (p. 21)

Documents

Key Specialties Roundtable: What’s in Store for Service Lines and … · 2014-10-20 · healthcare and The Cheesecake Factory restaurant chain. ... system executives as speakers