Before the Affordable Care Act became law in March 2010, ancillary services, including ambulatory care, were viewed by most leaders as subsidiary organizations, relegated to a priority well below that of the acute care services provided inside the hospital. Executives and board members focused almost exclusively on hospitalcentric metrics such as the daily census, the number of surgeries or the average length of stay.
Those days are gone.
At Catholic Health Initiatives, we refer to this evolution as the "Next Era of Healthy Communities," a conversion that requires each of the organization's leaders to perform in diametrically different ways than before. As a national organization operating in 18 states, CHI is undergoing the same fundamental shift away from a hospitalcentric approach to health care. In this new model, the activities and initiatives that occur outside of a hospital are just as important as what happens inside its walls. And hospital leaders who recognize and accept that change understand the essence of the organization's transformation from a hospital company to a health system.
They also understand that this transition from fee for service to payment for value means that hospitals are no longer revenue centers — they are cost centers. Thus, for hospitals to survive and prosper, leaders must broaden their roles and responsibilities, focusing on a strategic approach that spans the entire continuum of care.
Health care organizations such as CHI typically sought leaders with long, distinguished careers as hospital administrators. That career path is a solid background for any hospital executive. But it's also important that today's leaders have a strong background on the ambulatory side, a clear grasp of managing physician practices, and familiarity with insurance and risk.
Today's leaders need to understand the evolution from volume to value and appreciate the importance of risk-based contracting, epidemiology, population health metrics, and the lifestyle and demographic issues that impact community health. We are in the business of producing wellness rather than treating acute illness.
At CHI, we not only revamped roles and responsibilities, we changed the definition and description of our executives, creating two categories of leaders. Leaders who are now known as regional market chief executive officers are expected to reach far outside the hospital walls in building networks in the community that stretch across the entire continuum of care.
These leaders oversee a network of coordinated, integrated care with other providers in a way that ensures high quality at a lower cost, and that maintains the cost, quality and value proposition within a relatively predictable range. As we move toward population health and CHI goes at-risk with its own insurance programs, leaders must understand the factors that influence the health of individuals and entire populations, as well as the activities and actions that influence utilization of services for those patients.
This role is further complicated by CHI's strategic imperative to consolidate its operations into regional networks in states that include Colorado, Kentucky, Nebraska, Washington and, most recently, Texas. Under these conditions, the leader's job becomes even more complex, with an ever-expanding list of constituencies. Traditional leaders are accustomed to managing nurses and departmental directors; this new breed of leaders must become accustomed to managing stakeholders such as actuaries, epidemiologists and medical informaticists.
The second category in CHI's revamped leadership structure is the facility or market president, a more traditional hospital administrator whose job is to focus on operations, quality, costs, and billing and collections. The market president, who typically oversees a single facility, represents the public face of CHI in the community, and is responsible for quality, safety and the entire patient experience in close partnership with physicians.
One characteristic, however, is consistent for both categories: Future success rests on improving the quality of care at lower costs.
Adapting to Change
Earlier this year, CHI gathered all presidents, CEOs and administrators to discuss the change in job titles and the shifting responsibilities that reflected this new focus on partnerships, affiliations, provider relations and population health management.
Did all of our leaders embrace this change? Not necessarily. Most people don't have a burning desire to change the status quo. That's human nature.
It took some time for entrenched executives to absorb this move from volume to value. After years or decades in their roles, these leaders were told that they would no longer be rewarded for long-accepted metrics such as volume and procedures. In a new game plan under revised rules, they are being directed to do things that contribute to the overall, long-term health of the community, a measure that doesn't necessarily correspond to more volume but clearly reinforces value and quality for those we serve.
The calculation for success progressed from the number of admissions and surgeries to such health-related questions as, "What percentage of 6-year-olds in a defined population has had a full course of immunizations?" and "What percentage of people with diabetes are engaged with a diabetes-management group?"
This change in metrics and measurement was foreign to a lot of our leaders. Helping them adjust to a new environment in which we are actively attempting to reduce volumes was a significant issue that caused more than a little confusion.
For some leaders, this change led to a mix of sadness, anger and despair — after all, their worlds were being turned upside down. Despite those initial reactions, CHI has not lost its core of experienced executives. Most leaders across the enterprise adapted to their new roles. In the course of normal turnover, we have honed these new job functions and roles and hired individuals with the kind of skill sets that fit well into our new environment.
Our mission as health care leaders, after all, is to positively influence the people and the communities we serve. And leaders who accept that mission are enthusiastic about this opportunity to grow, to improve and to directly address our mission as an organization. The vast majority of health care leaders entered the profession for the right reason — they want to do good.
Our challenge is understanding that the way we do good may be different now than it was just a few years ago — particularly in terms of how we judge our personal and professional rewards and accomplishments.
Michael Rowan, FACHE (email@example.com), is executive vice president and chief operating officer for Catholic Health Initiatives, Englewood, Colo.