With hospital margins on the rise and financial position slowly improving for many organizations, top executives are mulling near- and long-term growth strategies.
"Now is the time for hospitals to re-embrace strategic growth to succeed in 2024 and beyond," wrote Erik Swanson, senior vice president of data and analytics, in the Kaufman Hall "National Hospital Flash Report," released Jan. 9. "Healthcare organizations cannot cut their way to financial viability – and must reinvest in strategic growth to sustain their mission."
He recognized leaders will need "discipline, persistence, and flexibility" to achieve meaningful growth. Mr. Swanson outlined three questions for health system CEOs and executive teams to consider as they chart the course for the next year-plus:
1. Is our market large enough?
2. Are we essential in our market?
3. How do we strengthen our competitive position?
For many CEOs, transformational strategy and embracing new ideas will be essential.
"If health systems are going to continue to thrive and survive in the years to come, they will need to dramatically invest time, resources and people into developing robust ecosystems of care," John Couris, president and CEO of Tampa General Hospital, told Becker's. "By this I mean, they will need to build pathways where patients can access the specific type of care they need in an environment that most effectively, efficiently and affordably services both the patient and the provider."
Executive teams are also exploring new types of partnerships or collaborations in spaces where they may have tried to acquire or build internally in the past.
"We will continue to see margin pressure resulting from reimbursement rates not keeping pace with inflationary trends that are escalating staffing and supply costs. As a result, you will see health systems optimizing their operations, which may include footprint re-evaluation, increasing focus on value-based care, and greater utilization of digital technology, such as remote monitoring and telehealth services," said Cliff Megerian, MD, CEO of University Hospitals in Cleveland. "There will likely be more collaborations and partnerships to expand services and increase access versus brick-and-mortar acquisitions."
Dr. Megerian said "innovative thinking is critical for success and, quite frankly, survival in our industry" and encouraged executive teams to invest in growing in-house expertise focused on developing new models of care.
Mark Behl, president and CEO of NorthBay Health in Fairfield, Calif., thinks healthcare is at an inflection point and leaders need to think differently about healthcare delivery and pursue bold ideas. He encouraged his C-suite colleagues to look beyond the next three years to imagine what healthcare will look like in 20 to 30 years.
"Only then do we start building the right foundation to be successful in this next frontier," he said. "If we look that far in the future, how many of our legacy workflows will be automated, and if so, shouldn't we be pursuing automation with much greater intensity? And what about payment models? If we all agree that traditional fee-for-service is unsustainable, and not providing the results we want and need, and the move toward more of a prepaid model is where we will be at some point in the not-too-distant (or distant) future, then what are the building blocks necessary to begin working on today?"
Kaufman Hall's length of stay trends already stand to benefit health systems with value-based care strategies, as the average length of stay is dropping with patient acuity shifting back to normal.
"Organizations that have adopted value-based and bundled payment models will benefit further as they transition and provide care at the appropriate clinical setting," Mr. Swanson wrote.