Every language has its collection of wise sayings.  They offer advice about how to live and also transfer some underlying ideas, principles and values of a culture or society.  These sayings are called idioms.  In this article, many of them have been used to describe where the healthcareindustry is going in 2018.  We will explore twelve of them and the ideas that form their foundation.

All executive leaders in healthcare have an idea where the industry is headed and what they need to accomplish to flourish.  However, for healthcare stakeholders, exactly how they will get there is about as clear-as-mud.

There is light at the end of the tunnel for healthcare leaders.  Learning about where the industry is going is the objective of the annual JP Morgan Healthcare Conference held January 8-11, 2018 in San Francisco.  The event has created a platform where large healthcare delivery systems share their opinions and strategies for the coming year.

Over 20 healthcare systems presented their plans for 2018.  They included Advocate Health Care, Aurora Health Care, Baylor Scott & White Health, Catholic Health Initiatives, Cleveland Clinic and many others.  They offered several key takeaways regarding where the U.S. healthcare delivery system is heading and it appeared that most are headed in the same direction.

Based on the strategic roadmaps for over 20 of the largest and most prestigious healthcare delivery systems in the country, here’s a list of twelve things hospital executives “must do” as outlined in Becker’s January 10th Leadership and Management section of Hospital Review.

1. Jump on the Bandwagon and Scale Their Organizations

The headline at the conference encompassed a flurry of announcements regarding major mergers.  Two of the mergers were front and center:  Downers Grove, Illinois-based Advocate and Milwaukee-based Aurora, which will be a $10 billion organization with 70,000 employees, as well as San Francisco-based Dignity Health and Englewood, Colorado-based Catholic Health Initiatives, which will be a $28 billion organization with 160,000 employees.  The size and scale of these mergers are pretty stunning. While the announcement of these and the other recent mega-mergers has forced many into their boardroom to determine what the deals mean to them, the consensus at the conference was this:  there are several different paths forward to achieve scale.  After listening to each organization’s presentation, then taking a pulse of the room, two things were clear.  The first is there is no definition of scale anymore in this market.  The second is that, despite this flurry of mergers, “getting really big” is not the only destination.

2. Don’t Put All Their Eggs in One Basket So They Can Find New Revenue Streams

Running counter to the merger narrative in the market, Salt Lake City-based Intermountain provided a good overview of the movement to what is called an “asset light” strategy of “smart growth.”  The strategy is radically contrarian to the industry norm, which is the capital-intensive brick and mortar playbook of buying and building.  As part of their strategy, Intermountain will open a “virtual hospital” delivering provider consultations and remote patient monitoring via telehealth.

Other health systems outlined a similar stream of initiatives they have in motion to diversify their revenue streams and expand their business model into higher margin, higher growth businesses.  One example is Advocate in Illinois formed a partnership with Walgreens.  Together, they now operate 56 retail clinics.  The bottom line is that they all recognize that they must think and act differently to be able to continue to fund their clinical mission and serve their community.

3. Kill Two Birds with One Stone While Managing Cost and Margins

While some are moving aggressively to get scale, everyone is looking to more effectively use the resources they have and get more operating leverage.  Margin compression was a consistent theme, with many systems now moving into consistent, stable operating models around managing margins versus launching reactionary initiatives when they find a budget gap.  What is emerging is a new discipline and continuous process around managing cost and margins that is starting to look similar to the level of sophistication we have seen in the past for revenue cycle management.

4. Be the Best Thing Since Sliced Bread and Promote Their Brand

Investing in and better leveraging their brand has become a strategic must for health systems.  The level of sophistication is growing here as providers shift their mental model to viewing patients as “consumers.” Aurora in Wisconsin cited their dedicated Consumer Insights Group and outlined their “best people, best brand, best value” approach that has been incredibly effective both internally and externally.  At the same time, the bigger investments for many health systems relative to brand are more on brand experience than brand image, with a focus on understanding and radically rethinking the consumer experience.  As an example, at Danville, Pennsylvania-based Geisinger, close to 50 percent of ambulatory appointments are scheduled and seen on the same day.  And every health system is making meaningful investments in their “digital handshake” with their consumer, creating and leveraging it via telehealth as well as mobile applications to enhance the customer experience.

5. Actions Speak Louder than Words. Operate as a System, Don’t Just Call Yourself One

One clear theme at the conference is different organizations were at different points along the continuum of truly operating as a system versus merely sharing a name and a logo.  There are a number of reasons for this, but you are increasingly seeing tough decisions being made versus just kicking the can down the road.  There has been a great deal of acquisitions over the last few years coupled with a new wave of thinking relative to integration that is more aggressive and more forward-looking.  This mental shift is actually a very big deal and perhaps the most important new trend.  Many health systems are heavily investing in leadership development deep into their organization to drive changes much faster.

6. Get on the Ball and Act Small and Agile

The word “agile” is quickly becoming part of everyone’s narrative with health systems looking to adopt the principles and processes leveraged in high tech.  Chicago-based Northwestern Medicine is an example of an organization that has grown dramatically in the last five years, now approaching $5 billion in revenue.  At the same time, they have still found a way to operate small, leveraging daily huddles across the organization to drive their results.  The team at Raleigh, North Carolina-based WakeMed has achieved a dramatic financial turnaround over the last few years, applying a similar level of rigor yielding major operational improvements in surgical, pharmacy and emergency services that have translated into better bottom line results.

7. It Takes Two to Tango, So They Must Engage Their Physicians

Employee engagement was a major theme in many of the presentations.  With the level of change required both now and in the future, a true focus on culture is now clearly top of mind and a strategic must for high-performing health systems.  That said, only a handful articulated a focus on monitoring and measuring physician engagement.  This appears to be a major miss, given that physicians make roughly 80 percent of the decisions on care that take place and, therefore, control 80 percent of the spend.  One data point that stood out was a 117 percent improvement in physician engagement at Northwestern.  Major improvements will require clinical leadership and a true partnership with physicians.

8. They Can’t Cut Corners by Not Leveraging Analytics

Many have reached their initial destination of deploying a single clinical record, only to find that their journey isn’t over.  While health systems have made major investments big data, machine learning and artificial intelligence, there was a consistent theme regarding the need to bring clinical and financial data together to truly understand value.  Part of this path is the consolidation of systems that is now needed on the financial side of the house with a focus on deploying a single platform for financial planning, analytics and performance.  The primary focus is to translate analytics not just into insights, but action.

9. Cybersecurity Can Cost an Arm and a Leg but Protection is a Must

As organizations move deeper into data, cybersecurity poses a major risk.  Over 40 percent of all data breaches that occur happen in healthcare.  During the keynote, JP Morgan Chase CEO Jamie Dimon shared that his organization will spend $700 million protecting itself and their customers this year.  Investments in cybersecurity will continue to ramp up due to both the operational and reputational risk involved.  Cybersecurity has become a boardroom issue and a top-of-mind initiative for executive teams at every health delivery system.

10. They Will Pay the Piper if They Do Not Manage the Social Determinants of Community Health

Perhaps the most encouraging theme for healthcare provider organizations was the need to engage the community they serve and focus on social determinants of health.  As Intermountain shared: “Zip code is more important than genetic code.”  To that end, Geisinger refers to their focus on “ZNA.”  They have deployed community health assistants, non-licensed workers who work on social determinants of health and have implemented a “Fresh Food Farmacy,” yielding a 20 percent decrease in hemoglobin A1c levels along with a 78 percent decrease in cost.  Organizations like ProMedica Health System in Ohio have seen similar results with their focus on hunger in Toledo, Ohio.  WakeMed has an initiative focused on vulnerable populations in underserved communities that has resulted in a significant decrease in emergency room (ER) visits and admissions and over $6 million in savings.

11. Go Back to the Drawing Board and Help Solve the Opioid Epidemic

The opioid issue is one that healthcare professionals take very personally and feel responsible for solving.  It came up in virtually in every presentation, and it is an emotional issue for the leaders of each organization.  The focus on opioids is good news, but the better news is that they are taking action.  As an example, Geisinger invested in a CleanState Medicaid member pilot that resulted in a 23 percent decrease in ER visits and 35 percent decrease in medical spending, breaking even on their investment in less than ten months.  While many would rightly argue that the economic rationalization is not needed for something this important, the fact that it is there should eliminate any excuse for anyone not taking action.

12. They Must Hit the Nail on the Head and Deliver Value

The Hospital for Special Surgery in New York is the largest orthopedics shop in the U.S. and a great example of how value-based care delivery is taking shape.  Perhaps the most revealing statistic they shared is that 36 percent of the time, patients receives a non-surgical recommendation when they are referred to one of their providers for a second opinion.  This is exactly the type of value-based counseling and decision-making that will help flip the model of healthcare.  Some systems are farther along than others.  Northwestern currently has 25 percent of its patients in value-based agreements, but other systems have less.  As the team from Intermountain re-stated to this audience this year, “You can’t time the market on value, you should always do the right thing, right now.”

Summary

Many Americans follow an age-old tradition by starting the New Year with resolutions.  Many of the top healthcare organizations have made their resolutions clear with their predictions and strategic imperatives outlined in the article: Top 12 takeaways from the 2018 JP Morgan Healthcare Conference—while the destination is uncertain, the direction is clear.  In 2018 we should expect to go on another wild-ride as industry experts believe we will experience dramatic changes and some surprises just as we did in 2017.