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Strategic Direction
Calling Community Hospitals: A New Era of Opportunity

By Mike Williams,  President and CEO, CHC

As we usher in 2017 with our country’s new administration, it’s not surprising that hospitals, healthcare providers, insurers, and consumers alike are asking “what’s next?” related to healthcare. There’s no question that some changes will occur, although they won’t happen overnight. Many details are forthcoming in the weeks and months ahead.

 

Regardless of the road in front of us, we must continue to position community and rural hospitals in optimal fashion. CHC will be looking at innovative ways to help community hospitals during these times of change, by lending our expertise, and upholding our mission to guide, support and enhance the mission of community hospitals and healthcare providers.

 

Strong community hospitals are critical to the vitality of entire populations, especially in rural environments, because they support both the health and economy of the communities they serve. Here are some top-line recommendations to stay the course for continued success, even with impending healthcare reform changes on the horizon:

  • Assess your market position. As a smaller community hospital, this may be a good time to examine relationship opportunities with additional organizations. Could you benefit from optimizing connections with other providers through affiliations or clinical relationships? Are existing services duplicated in your market? Be creative in exploring new associations to position your hospital confidently and strategically.
  • Reduce operational expenses. Maintain or reinvigorate your existing productivity efforts. Monitor key productivity measures, including FTEs per occupied bed. Do you have the right FTEs at the right place at the right time? Also, consider supply chain optimization from an operational perspective. Are you paying too much? Selecting the right group purchasing organization can help streamline your processes and yield optimal supply savings and support, making this a short-term critical success factor.
  • Evaluate your facility’s clinical strength. Look to your IT department for clinical outcomes documentation, and partner with medical staff members to review opportunities for improvement. Examine your HCAHPS scores to determine if there are ways to enhance patient experience.

Even with health care changes ahead, I’m confident community hospitals can persevere by focusing on and optimizing their strength and position as we welcome the New Year.

 

Learn more about strategies for success moving ahead in 2017.

 

 

Tags: Affordable Care Act, Healthcare Reform , Hospital Management, Hospital Performance Improvement, Operational Improvement, Strategic Direction
Board Communication, Teamwork, Spell Success at Yoakum Community Hospital

by Karen Barber, CEO, Yoakum Community Hospital

 

Leveraging Resources for Change

 

When I joined the Yoakum Community Hospital team in 2006, one of the biggest hurdles I faced was improving board-management relationships. I realized that addressing this challenge would be essential to paving the way for a better, more secure financial and operational future for the hospital and community. Elorine Sitka, Yoakum Board Trustee and Chair, shared this vision, and together, we turned ideas into reality.

As a 25-bed critical access hospital in rural Yoakum, Texas, it became apparent that trustees had not been receiving all the information they needed — in a timely way — to make well-informed decisions. We realized that trustees were challenged in performing their basic fiduciary and financial duties, and change was necessary to inspire and create a high-performing board dedicated to the hospital’s success.

 

As partners, our goal was to improve the hospital for the good of the community. We developed recommendations on ways to improve board relations and engagement – laying a solid benchmark for success for many rural hospitals.

 

Five Steps to Success

 

Certain basics are “must-haves” for continuous improvement in board-management relationships, including:

 

1. Clarify expectations regarding roles and responsibilities

Governance and management are distinct functions. At Yoakum today, board members view their role as strategists and overseers. They leave management and operations to hospital leaders and managers, although that wasn’t the case previously. Board members provide direction. Managers create and implement tactics to support board strategies. One significant consideration is to provide board members with updates to keep them in the loop.

 

Identifying specific responsibilities in written form can also help prevent confusion related to roles. Discussions about mutual expectations are important, too. What do trustees expect of the CEO? What types of things can a CEO do without prior board approval?

 

2. Foster open, consistent communications

Regular, informal phone calls and a weekly newsletter are great tools to keep board members informed. An online portal provides members with meeting materials to review at least a week in advance. Trustees are encouraged to reach out to leaders if they have a question or concern, as well as participate in meeting discussions and respectful debates.

 

3. Make meetings purposeful

Make board meetings organized and action-oriented. Take informational items off the agenda for trustees to read on their own. Focus face-to-face time on several major issues that require voting at board meeting time.

 

I strongly suggest that everyone “stick to the agenda.” The entire team is busy, so keep meetings short and on point. And set aside time to socialize. Sharing a meal together before getting down to business inspires fellowship and teamwork.

 

4. Create resourceful onboarding and continuing education

New trustee orientation is vital and should include meetings with key stakeholders, including the CEO and CFO, as well as important partner organizations. A tour of the hospital and distribution of educational materials including an organizational chart and a glossary of healthcare industry terms and acronyms are part of the process.

 

5. Identify potential trustees

A specific recruitment process for new trustees is key. At Yoakum, we maintain a running list of potential board members, keeping in mind leaders and colleagues with diverse backgrounds. Another consideration is to identify potential board members without any sort of personal agenda. The focus should be on improving the hospital for community health.

 

We also encourage board members to listen to presentations offered by hospital staff, and take advantage of state and other sponsored trustee education programs. At Yoakum, we also invest in an annual board retreat and involve trustees in monthly birthday celebrations and other hospital events.

 

Building on Success

 

Looking back, the difference at our board meetings today is obvious. Today we have a strong board and dependable, trustworthy leadership committed to a common purpose.

 

To learn how Yoakum Community Hospital developed a high-performing board, read this CHC case study.

Tags: Hospital Board Advisory, Hospital Performance Improvement, Operational Improvement, Strategic Direction
Best Practices for Effective Physician On-Boarding

by Stephanie Hobson, Director of Physician Recruitment, CHC

 

You’ve successfully recruited the physician you need to serve your community. What comes next? The hiring process is just the first step in retaining these professionals you have worked so hard to recruit. Equally important is physician on-boarding — the process of familiarizing and orienting physicians to a new healthcare facility or practice, and to the culture of your organization. On-boarding introduces new physicians to the community, integrates them into the medical staff, helps them establish their practice and achieve a firm financial foundation in the first year.

 

The case for on-boarding

 

An effective on-boarding process can help retain physicians in an increasingly competitive and challenging environment. The candidate pool is shrinking and the number of medical students continues to decline. In the year 2020, the expected shortage of practicing physicians is estimated to be 91,000.

 

Physician replacement costs are significant. The average cost to turn over a physician is $1.2 million. This impacts hospital revenue and patients’ perceptions of care. Replacing the productivity of a retiring internist will require 1.6 younger physicians, according to a 2014 Truven Analytics study. A systematic, well-organized on-boarding process can increase retention (avoiding the costs associated with physician replacement), stabilize access to care, and reduce outward migration.

 

Lack of an organized on-boarding process has added ramifications: physicians could lose confidence in the hospital or their group by a perceived lack of interest in their success resulting from poor on-boarding; and a delayed practice ramp-up period would increase the time needed to see positive ROI on an income guarantee or employment.

 

On-boarding recommendations

 

Here are some best practice tips to improve the physician on-boarding process.

 

Create an effective on-boarding program customized to your facility. Survey existing physicians to obtain feedback about the current on-boarding program and create a small task force to outline an ideal state process. Assign project leaders to assemble support teams including community members and volunteers, and measure results.

 

Set up Phase I (signed agreement to orientation) and Phase II (orientation to 90 days) action plans.

  • Phase I should include the completion of credentialing and enrollment; weekly communication from a designated hospital liaison; and personal/family assistance, such as house hunting, connecting with local service providers (Internet, phone, etc.) and getting kids in school. Welcome the entire family to the community.
  • In Phase II, complete the orientation process and review guidelines and expectations; market physicians to the community and other providers; and help integrate the physician and their family into the community by linking them to resources, groups and organizations.

 Additional best practice tips include:

  • Integrate new providers into your culture. Tell them what makes your culture and mission unique. Explain your hospital/health system goals.
  • Ensure basic resources are provided ‘day 1,’ including a lab coat, prescription pad, an ID badge and a tour of the facility.
  • Give them time to set up their office and meet their team before they start seeing patients.
  • Bring in their spouse to help them fill out benefits elections.
  • Give them flu shots and vaccinations etc. to meet 100 percent of employee wellness goals.
  • Have hospital leaders visit/eat lunch with them during orientation.
  • Train them on the EMR/how to log in to email/how to access resources; have them complete education modules during orientation.
  • Assign an administrator as a point of contact for each new physician and have them meet regularly during the first year.
  • Send out a postcard to your primary and secondary service area introducing the new physician. Include photos, address, phone number, and a ’now accepting patients’ message.

Making it work

 

Physician on-boarding doesn’t “belong” to the CEO alone. It should be a shared responsibility across hospital leadership, HR, the group or physician the doctor is joining, physician leadership, community members such as Chamber representatives, and hospital Board members.

 

On-boarding is the benchmark for physician engagement. An effective process can reduce physician turnover and recruitment costs, establish continuity of care, increase hospital productivity, and positively affect patient and employee satisfaction scores.

 

Learn more about CHC Physician Recruitment Strategies for community hospitals.

Read the CHC Physician Recruitment services overview.

Tags: Hospital-Physician Alignment, Physician Recruitment, Strategic Direction
Building Successful Hospital-Board Relationships

by Craig Sims, SVP, Southwest Hospital Operations, CHC

 

Community-based hospitals put the “care” in healthcare, and

meaningful hospital-Board partnerships based on trust and mutual goals drive this mission. Board members make important decisions to serve the community , and help develop strategies to ensure the hospital’s long-term sustainability.

 

Here are some best practice tips for positive, productive Board-CEO relationships.

  1. Develop a Trustee recruitment and retention process. Recruiting and retaining Trustees is too important to be left up to chance. In fact, “retention” begins in the recruitment phase and never ends. Initial orientation for new Board members should include one-on-one time with the hospital CEO and CFO, as well as the Board Chair and Finance Committee Chair. After six months, ask Trustees about their orientation and education experience. Seek ways to improve.
  2. Foster open communication. Communicate with candor. Facilitate two-way dialogue and encourage open communication. Create an environment of trust to help everyone tackle tough decisions. Even if there are dissenting opinions, a collegial atmosphere allows Board members to say to one another, “I value your input — tell me more.”
  3. Communicate frequently with Board members. Share timely information on hospital and community events, along with local, regional and state issues impacting health care. Provide educational articles and links, send out Board packets in a timely fashion prior to Board meetings, and utilize current technology to facilitate communication (electronic Board packets and Board portals, for example).
  4. Make meetings meaningful. Start with the “why” instead of the “what.” Begin Board meetings by reading the mission, vision and values of the organization instead of jumping into reports. Productive meetings require engagement; move informational items off the agenda for Trustees to read on their own. Focus on three to five issues that require voting. In closing the meeting, the Board chair should ask the group:

    -     Did we focus on the right issues?

    -     Did we participate in an active way? 

  5. Understand the difference between governance and management. The role of the Board is governance. The Board governs and sets policy; hospital administration manages and implements policy. Hospital Boards should focus on strategy, not operations.
  6. Facilitate continuous learning. Effective boards are well-educated. Budget for Board education, including learning opportunities such as:
    -     Comprehensive Board orientation
    -     Annual Board self-assessment
    -     Planned continuing education
    -     Board retreats

 CHC offers a variety of advisory services depending on client needs — including board education — to help enhance hospital CEO-board relationships. Learn more about CHC Hospital Board Advisory Services

Tags: Hospital Board Advisory, Hospital Performance Improvement, Strategic Direction
Three Steps to Help Rural Hospitals Overcome Financial Distress

by Michael Morgan, Director of Due Diligence and Strategic Analysis, CHC

 

An array of issues – from increasing charity care, bad debt and declining reimbursement rates to negative profit margins – create financial distress for rural hospitals. Despite today’s challenging operating environment, many rural hospitals across the country are using a practical approach to grow revenues and control costs.

 

Step 1: AWARENESS

Know the signs and symptoms of declining financial health

 

How does a hospital reach the point of “no return” where closure becomes inevitable? Were there warning signs along the way? Were they missed? Would the outcome have been different if danger signals had been noted and addressed?

 

Discussions around performance, growth and capital stewardship are at the heart of strategic planning for most health care organizations, and even though financial indicators are a harbinger of financial health, “finance” is often considered the responsibility of the chief financial officer or other “financial” folks. Budgeting is usually department-specific.

 

Like car dashboard warning lights, financial warning signs mean it’s time to sit up and take notice. A regular review of the most important indicators related to an organization’s financial health should be a shared responsibility for the entire health care team. Data points to focus in on include:

  • Look at aggregate volume and provider utilization trends. This data can offer a big-picture perspective to leaders and managers across departments.
  • Share operating ratios, including expenses as a percent of net operating revenue focusing on labor, supplies, and purchased services.
  • Examine labor costs relative to volumes. Is the hospital meeting productivity goals? Look at FTE staffing per adjusted occupied bed targets.
  • Review patient revenue indicators including bad debt percentage and net to gross percentage by payor class. Are there shifts in payor mix that need to be addressed?
  • Study liquidity ratios, such as net days in patient accounts receivable and cash collections as a percentage of net revenue minus bad debts. What steps can be taken to improve cash flow?

Step 2: INFORMATION GATHERING

Identify and assess significant financial indicators

 

Operational best practices include a monthly review by hospital leadership of key measures, many of which are listed above. Procedures should be put in place by the hospital’s finance department, with input from department managers, to produce accurate monthly stats and financial performance metrics to facilitate these periodic reviews. A closer look at financial indicators also should be part of the annual review and planning process. A key to financial improvement for hospitals is clear communication of expectations and goals across the leadership spectrum in order to accomplish desired changes.  

 

Step 3: ANALYSIS & ACTION

Connect the dots for sustainability

 

Once data is available to everyone, the next step is to analyze the root cause. For instance, if inpatient admission volumes are down significantly in a current month compared to the same month in the previous year, the conclusion might be, “We think it went down because there were fewer flu cases this year compared to last year.” That may be true, but speculation can be risky. Do a deep data dive and take the guesswork out of the equation. What were the primary diagnoses of the admitted patients for each time period? Were there any abnormal physician trends? How do observation days this month compare? Understanding the trends and their causes is the key to creating actionable solutions.

 

Regular reviews of key financial indicators can identify operational best practices, support strategic planning efforts, enhance understanding and create accountability. These reviews can confirm or redirect efforts aimed at sustainability. The most critical element of the entire process is answering “why.” Only then can the team develop solutions to improve operating margins and avoid financial distress.

 

Learn more about CHC's Financial Improvement services.

Tags: Affordable Care Act, Healthcare Reform , Hospital Management, Hospital Performance Improvement, Operational Improvement, Strategic Direction

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