Moving from survival mode to growth mode

The familiar saying, “When the going gets tough, the tough get going” no doubt has helped community hospitals persevere through tumultuous times of the past. But with healthcare facilities facing unprecedented hardships, Community Hospital Corporation’s CEO and President Jim Kendrick gives the popular proverb a new twist: “When the going gets tough, the tough start growing.”

With everything hospitals are up against these days — clinician shortages, increasing supply costs, payer-mix and reimbursement challenges, to name just a few — can they realistically shift into growth mode?

JK: In an “evolve or perish” situation, I would argue that strategizing and identifying growth opportunities are more important than ever. Even rural and community hospitals in financial distress need to look beyond solvency as their main objective and consider bold innovation to boost their bottom line and bolster their status as a vital resource to the populations they serve.

Generally, the process begins with a thorough operational assessment to find out where a hospital stands, as well as a market analysis to help identify opportunities for growth. However, as we saw during the pandemic, crises also uncover growth potential. Challenges brought on — or worsened by — COVID-19 spurred CHC hospitals into problem-solving mode, and they’re leveraging those solutions to better serve their communities.

The pandemic drove many hospitals to the brink but, as you point out, it also gave rise to lasting innovations. What example can you provide related to the nursing shortage?

JK: At CHC’s ContinueCARE Hospital at Baptist Health Corbin, workforce gaps during the pandemic led them to team nursing — a move that turned out to be a permanent shift from the conventional nurse-to-patient ratio model. As opposed to assigning a small number of patients to one RN, several staff members working at the top of their license care for larger groups of patients, allowing RNs to devote more time to responsibilities that require their specialized training. Initially, the hospital established nurse-based quality metrics to track. They also cross-trained and upskilled existing staff, and later developed a formal affiliation with a nearby university to train and recruit healthcare workers with diverse skill sets to round out the teams. As a result, the hospital is rightsizing the number of RNs on staff while maintaining patient care and satisfaction standards.

In addition to the nurse shortage, the supply shortage and increasing costs due to inflation have caused many hospitals to reassess supply chain efficiency. How can they problem-solve in this area?

JK: In many respects, successful innovation depends on partnering with organizations that have your back, including your group purchasing organization. COVID taught hospitals and GPOs alike a hard lesson about the importance of vendor diversification and alternative sourcing. Locally, community hospitals are generally held in high regard, and many of them leveraged their relationships with small businesses to alternately source supplies during COVID. While such initiatives were necessary, it’s important that hospitals realize that their GPO should assist with outreach efforts during supply chain disruptions, as well as provide access to the GPO’s own alternate vendor base.

A GPO should also offer ongoing support and technology solutions to continually optimize pricing and tier ranking. Often — and understandably — community hospitals lack the data-analysis capabilities to monitor supply chain metrics, so they should make sure their GPO provides analytics to help identify supply chain inefficiencies, as well as instances of GPO noncompliance.

What other types of partnerships promote business growth and innovation?

JK: The challenges confronting hospitals are grave enough in some cases to threaten their very survival. That’s why partnering with other hospitals and organizations to gain access to capital and other resources has become increasingly common. Usually there are several drivers, but many rural and community hospitals serve an older, underprivileged populace and have been hit hard by reductions in reimbursement rates by Medicare and Medicaid. These hospitals might benefit from the economies of scale made possible through some types of partnerships, such as a clinical affiliation, or the infusion of capital that comes with a merger or acquisition.

The “last resort” mindset regarding mergers and acquisitions has obsolesced, as community hospital leaders recognize that their continued existence is ultimately more important than their independent status.

communityhospitalcorp.com