Community hospitals matter. Community hospitals have a unique place in the healthcare delivery system. They address the day to day medical needs of the communities they serve, from delivering babies to managing chronic illness to potentially extending behavioral health services and being the bridge between large, regional facilities and people’s homes and support networks. They also provide a valuable community service by being available for life-threatening emergencies and as an important arm of the public health system. Finally, they are almost always economic anchors of the area, contributing to the vitality of a community and the livelihoods of employees and their families.

Affiliate or remain Independent?

Community hospitals also face significant challenges, particularly if they choose not to affiliate with larger systems. The decision whether or not to affiliate is an important one, but the choice to remain independent should belong to the hospital board and leadership given its broad mission to the community. There are significant considerations that leadership should make, and given the rapidly evolving environment, there is no time to take a “wait and see” approach.

Transition from Volume to Value

Community hospitals must consider this transformation as urgent and imperative. New business capabilities are necessary to deliver in value-based environment. For instance, effective cost management requires a step-wise approach to more accurate cost measurement. Most independents lack the resources necessary to accurately reflect the immediate value-recapture opportunities.

Drive sustainable efficiency improvements

The question becomes one of prioritization. In parallel to daily activity, hospital leaders should be working to overcome some of the key issues that disproportionately impact independents, including the relative lack of negotiating clout with payers and reduced economies of scale with suppliers. However, the answer is not high end service lines or additional surgeries.  The real key is to focus on staff efficiency and linkages with the broader community via post-acute care strategies, ACOs and other value-based contracts. These more holistic and systemic improvements generate sustained financial resilience.

Get Lean to unlock value

Taking a page from the lean playbook, many hospitals are working to create cultures of quality and safety, in a bottoms-up fashion: by engaging the staff themselves. The most knowledgeable people on staff are the front-line operators. If leadership can create a genuine dialogue, they will enable some of the most engaged and creative problem solvers in the organization. That genuine dialogue is not easy; in fact, leaders may be unintentionally stifling candid feedback.

Avoid calling the same lazy play

The go-to solution of lazy consultants everywhere: the layoff. It is disingenuous to say there should never be a layoff. This “solution” has been overly introduced into hospitals. While it may positively impact near-term financial results, it poses significant downstream risks towards: patient safety, staff morale, financial penalties associated with decreased quality of care and patient satisfaction.

Think & Act Big

Thoughtful engagement with staff at the operational level and rigorous management of staff utilization relative to patient volume are critical to achieving the mission of hospitals everywhere. The best-run systems prioritize value management (performance management and continuous improvement) capabilities. Given the greater scale of investor-held or large non-profit systems, the best run systems can afford to invest resources in doing just this in a daily, directly accountable fashion. While this may seem like a luxury from the Independent’s perspective – no hospital can afford NOT to invest in the tools and processes required to thrive in the new Value-based Healthcare environment.

Partner with Expertise

Patients seek physician expertise to get well. Hospitals need partners with expertise in developing a healthier way for hospitals to operate. Healthier patients and healthier bottom lines are not mutually exclusive.

We get it; all of these things must be done while “keeping the lights on.” Your organization has a duty to your patients and their families and to your staff, regardless. That’s where we can help. For 20 years, Sense Corp has built a business delivering expertise with a practical perspective to our clients. We have proven successes with hospitals, PCPs and specialists to achieve and surpass goals in value-based care.

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