Integrating care, cutting costs

Hospital leaders have spent years in an unsettled environment talking about integrated care, but 2013 could mark a key year when officials follow through on those conversations and make significant headway in improving efficiency through new delivery models.

Successful organizations will make sure staff is better engaged, says Thomas Dolan, president and CEO of the American College of Healthcare Executives. Physicians play a critical role, and system and hospital executives will need to find new ways to collaborate effectively with them, ensuring they're on the same page as more accountable care organizations and patient-centered medical homes are established in the months ahead.

Communication with staff is key, Dolan says, because there's a good chance personnel will be reduced as providers continue the shift toward ambulatory services. That's a prediction echoed by the country's largest nurses union, National Nurses United, especially since labor is a healthcare organization's largest cost.

“Hospitals and health insurance companies are trying to figure out how” the Patient Protection and Affordable Care Act is going to affect the bottom line, says NNU Co-president Deborah Burger. “And they're trying to figure out how to maximize their profits by doing everything they can to restructure how healthcare is provided.”

At the same time, further implementation of Six Sigma and Lean strategies, coupled with other process-improvement techniques for cutting costs, will continue to grab a lot of attention from hospital administrators, Dolan says.

“The No. 1 story is the continuous quest to reduce costs and integrate care,” he says.

Hospitals will continue to acquire physician practices as they work to ensure a strong continuum of care to mesh with provisions of the Affordable Care Act that are expected to boost patient volume. Medicaid expansion under the ACA could add as many as 30 million enrollees under the program starting in 2014, driving demand for physician services, especially in primary care.

Dolan has announced he will step down in May, and last week the ACHE named Deborah Bowen, the group's executive vice president and chief operating officer, as his successor. More healthcare organizations could be making similar transitions in the C-suite. Executive turnover is likely to increase in 2013 as more baby boomers retire, Dolan says. The most recent ACHE data shows hospital CEO turnover held steady in 2010 and 2011 at 16%, but Dolan says he wouldn't be surprised if that rate increases to 18%, which is where it stood in 2009 when hospital CEO turnover hit an all-time high.

Beyond CEOs, increased executive turnover at all levels also could be a symptom of appointing a senior-level replacement from outside the organization, Dolan says. Not only can such transitions cause resentment from staffers who perceive they weren't given a fair shot at a promotion, but also sometimes the replacement executive just isn't a good fit. Because they aren't as familiar with the system or hospital, those new hires can require a longer learning curve compared with an internal candidate who is more comfortable with the organization's policies and culture.