Sitting Ducks Get Shot … Especially While Waiting for the Inevitability of Healthcare Reform

By Kate Fenner, RN, PhD, Chief Executive Officer, Compass Clinical Consulting

Everyone is waiting for the shoe to drop – the impact of Healthcare Reform on hospitals. The details change daily depending upon which government plan is getting attention by various Congressional committees.

No one yet knows what shape reform may take but the predictable is being prognosticated by the pundits; we will most probably be asked to do more with fewer resources. One CEO of a for-profit system acknowledged to us recently that reform is one of the issues that is robbing him of sleep. Another CEO of a prestigious academic hospital is already taking steps to be out ahead of the game with a major workforce planning and productivity process redevelopment for when the inevitable decisions are made into law.

When you know the inevitable, why wait for details?

The cost pressures will not disappear. Increased access to high-quality healthcare must be paid for by everyone – including hospital providers.

1. Increased access brings both problems and opportunities. Problems for those not ready and opportunities for those hospitals that are getting ready to turn difficulty into advantage.
2. Cost pressures on providers likewise hang like a sword over every hospital leader, with little foreseeable advantage to community and academic hospitals. Again, however, there is opportunity for the prepared.

Smart executives can begin girding their hospitals for reform, regardless of requirements. How so? By stepping back two paces, taking a dispassionate eye to evaluating the status quo and going about the business of needed change before it’s mandated.

Several changes are predictable.

First, is the necessity of absolute efficiency. This is just a restatement of the Four Rights: right people with the right skills using the right processes in the right numbers. There will be no room for bloat, redundancy, inefficiency and overstaffing. Well-managed productivity systems and processes will be critical to preparedness.

Second, will be managing patient throughput, length of stay and case management. This requires admitting only those who need to be admitted, treating efficiently/effectively and discharging in a timely manner while minimizing waste, unnecessary care and readmission. Shaving patient days for particular DRGs will translate into millions of dollars in greater efficiency.

Third, will be managing revenue cycles with a draconian eye towards effectiveness; idle money, cumbersome systems and obscure processes must be banished.

Underlying these three critical requirements is the use of benchmarks. Valid yardsticks for measuring one institution’s performance against peers are ubiquitous; courage to dispassionately apply them is needed. But one hospitals benchmarks and targets cannot be arbitrarily dropped on another hospital. Each situation is unique and both senior and mid-management must be in agreement and take responsibility for making changes to hit the targets they collectively agree to meet.

A dispassionate assessment of current organizational state is the foundation for prioritizing and then addressing the areas above. Executives frequently have a “gut feel” that an area isn’t functioning at its optimal level. Application of measurement derived from objective industry standards permits validation of that feeling and opens the door to the necessity of corrective action. Armed with realistic targets and needed process changes, leaders can bring order to the potential chaos threatening the viability of the organization.

Don’t be a sitting duck. Smart executives aren’t waiting for reform to materialize, they are preparing now by getting their organizations lean and effective in anticipation of the requirements that are inevitable, regardless of what reform regulations become law.

For more information on hospital preparation BEFORE reform hits, visit Operational Improvement.

Filed Under: Featured Articles • Hospital Leadership

Tags: benchmarks, better hospitals, Bipartisan healthcare reform, change, Featured Articles, Obama Healthcare Reform Legislation, patient throughput, Revenue cycle management, staff productivity