Tom Flannery is a senior client partner for Korn Ferry Hay Group’s Executive Pay and Governance practice. Dr. Harry Greenspun is chief medical officer and managing director for Korn Ferry Health Solutions.
So you think your industry is going through a lot of changes? In healthcare, leaders must constantly monitor new techniques and devices that may well save lives, while keeping a sharp eye on costs that are scrutinized by insurance and government pros alike. Ever tried to track the latest changes in Medicare payments, or help the cardiology department stay on top of the latest patient outreach program?
It’s hard to imagine dealing with much more even if a new healthcare law had been passed.
The healthcare industry made headlines recently over the back-in-forth in Washington D.C. Whether the effort to overhaul government-supported healthcare is dead or just in a temporary, medically induced coma remains to be seen. But the bottom line is that healthcare is undergoing massive changes even without any new laws. To succeed in this ever-changing environment, healthcare leaders are going to need to focus on some key steps. Of course, the industry has been in flux for decades, so it’s hardly just the changes in recent years under the Affordable Care Act that have forced industry pros into financial somersaults. Meanwhile, the prospect of a new law makes margin forecasting even harder.
While new treatments are constantly introduced, at the same time insurers and employers continue to push down the amount they’re willing to reimburse hospitals and medical professionals for procedures. Meanwhile, healthcare organizations are driven to focus on improving the outcomes for patients—not just increase the number of procedures done to them. All of that puts pressure on a healthcare organization’s operating margins and physician take-home pay.
To succeed in this ever-evolving environment, healthcare leaders need to focus on some key steps. Here are five that I see.
1. Don’t worry about D.C. for now.
No one knows what type of changes to healthcare law, if any, will ultimately come out of our elected leaders. So healthcare executives should just focus on some of the forces they can control, like managing costs; using data to make better decisions; engaging and satisfying customers; and shifting toward population health (the improved care of wide groups of people). So far, it looks like many healthcare leaders understand this. In a recent survey from healthcare data firm Premier, 65 percent of healthcare executives intend to increase or increase substantially efforts to control the cost of care management efforts, while 45 percent will look to increase or substantially increase investments in patient engagement initiatives.
2. Get the talent pipeline in order.
As baby boomers continue to age into senior citizens, there will be an increasing demand for medical professionals. At the same time, top-notch healthcare organizations are going to find themselves consistently raided by rivals for top talent. Business continuity has to become a much more important issue for the boards of healthcare organizations. The best organizations will have talent pipelines that can sustain them for 20 years.
3. Use data to evaluate that talent.
There’s a big push in healthcare to use data to streamline the supply chain, find financial efficiencies, and improve clinical care. It should also be used in performance evaluations. Too often healthcare organizations are relying on the halo effect of medical professionals’ goodwill.
4. Address the pressures on doctors.
Hospitals are going to have to become better at resource allocation to keep their best medical talent. That’s because both private insurers and the government are lowering the amount of money they’re willing to pay for procedures. For instance, Medicare is expanding its bundled payments programs to cover a larger range of procedures, lowering costs and variability. Those and other initiatives have a direct impact on a doctor’s pay.
5. Allow professionals to do what they do best.
Pay issues aside, healthcare leaders have to develop systems that enable “practice to license,” essentially allowing medical professionals to do what they do best without getting bogged down with other work. For example, doctors or nurses in an intensive care unit are often asked to handle insurance information from the families of patients. That’s an essential task but one a case manager or social worker can do faster, more effectively, and cheaper.
In the end, trying to predict the future can be both fruitless and frustrating. However, ensuring an organization can adjust and adapt is a sure bet.