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Community Hospital Blog

May 2018
Top Concerns of Community Hospital CEOs

By Craig Sims, CHC SVP Hospital Operations

 

Asked to rank their most pressing concerns, most hospital CEOs and leaders put financial challenges at the top of the list, followed by governmental mandates and personnel shortages. In deeper discussions, though, it is clear that their most concerning issues intertwine in complex ways. While there are no simple solutions, this interconnection means that improvements in one area often bring about improvements in other areas. Faced with market- and reform-driven changes, wise leaders consider each challenge in its broader context for effective planning that takes all relevant factors into account.

 

Quality Improvements and Cost Reduction

 

CEOs are grappling with how to balance cost and quality imperatives. Quality improvements and cost reduction aren’t mutually exclusive and can, in fact, occur simultaneously. While this has always been the case, it’s especially apparent since Affordable Care Act provisions and value-based care models link reimbursements to quality of care.

 

Personnel and Populations

 

Affecting a hospital’s ability to provide quality care is appropriate staffing. To start with, hospital leaders should make certain that labor—typically a hospital’s greatest expense—is managed and monitored. It’s a best practice to use a productivity tool for accountability and the right staffing mix. Equally important is overcoming recruitment challenges and addressing personnel shortages. The national nursing and physician shortages are especially concerning in rural America, where more than 20 percent of the population resides but only 10 percent of physicians practice, according to the American Academy of Family Physicians. Disproportionately, the rural population is aging and may require care from specialists at a life stage when driving long distances is not a safe option. Community hospital CEOs are therefore concerned whether their facilities can adapt to meet the needs of their patient populations.

 

Service Lines and Revenue Streams

 

Concerned about costs as well as the community, hospital CEOs are evaluating existing service lines to make sure they help enhance revenue while supporting specific community needs. A common redundancy is home healthcare, for example. Many community hospitals still operate home health programs as loss leaders even though several other providers have sprung up in their area. In that case, it might make sense to discontinue the service line. On the other hand, if a hospital’s unprofitable home health program is the only one in a hundred-mile radius, discontinuing it may not be an option.

 

More than ever, hospital CEOs are challenged with making difficult decisions for the greater good of preserving the hospital’s financial health.

 

Wiser CEOs realize that long-term success depends on top-line growth, not just cost reduction, and are looking to add value and deliver needed healthcare service for their community. This brings us back full circle to quality care and how it connects to financial health. When CEOs keep patient safety and care in focus, it’s easier to gain clarity around other concerns the hospital faces.

Tags: Hospital Management, Hospital Performance Improvement, Operational Improvement, Rural hospitals, Turnaround

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