2024 Healthcare Trends and Essential Leadership Collaboration

One of the critical bellwethers of a healthcare organization's success in strategic planning is how well the health system leaders work with their boards. In this episode of Value-Based Care Insights, we sit down with Ivan Mitchell and Ann Scott Blouin to identify 2024 healthcare trends, their impact on provider organizations, and how executive leaders can engage with their board of directors. Gain insights on the top trends that are the greatest hurdles for healthcare providers and the importance of collaborative leadership.

• Achieving short-term goals while maintaining a focus on long-term objectives requires healthcare provider organizations to actively engage and collaborate with health system leaders and boards.
• Challenges in Medicare Advantage, such as misalignment and administrative issues, may pose a threat to provider organizations.
• Improving financial performance requires hospitals to align incentives, engage physicians in decision-making, and leverage tools such as telehealth to address labor shortages and ensure equitable access to care.

LISTEN TO THE EPISODE:

 

Transcript:

Daniel J. Marino: 

Welcome to value-based care insights. I'm your host, Daniel Marino. In today's episode, we're going to spend some time talking about some of the challenges that we see as we enter into 2024, I had an opportunity to write an article kind of highlighting. Some of what I see is, is these key trends as moving in 2024. I've done this for the last, probably 7, 8 years. And I often do it by reflecting on what we've seen in in 2023 or the years prior. And then how health systems, how healthcare leaders either reacting to it or what they may face as we enter into this New year. But as I was writing this this year's article, and reflecting on some of the work and the conversations that I've had with healthcare leaders, one of the things that really, that that dawned on me that was an important element was really around effective governance. In 2023 we had an opportunity to do quite a few strategic planning sessions or engagements, and had done a number of board retreats and it and kind of a critical element, as I reflect back on successes of organizations as they've navigated through the challenges of 2023 is how well health system leaders had worked with their boards and effective governance being really a critical component in allowing these organizations to realize some of the opportunities, but also manage through some of the challenges. My article focuses on 8 key trends that we see facing healthcare providers, but it also identifies some insights that healthcare leaders, as well as healthcare boards should consider as they work together to plan some of these exec some of these initiatives.  

Well, I'm really excited today to have as my guest a prominent CEO Ivan Mitchell. He is Chief Executive Officer of Great Plains Health in North Platte, Nebraska, and I'm also joined today by Ann Blouin, a prominent board member, former healthcare executive nursing leader, and a longtime mentor of me. Very excited to have both you, Ann, Ivan, with us today on the program. Welcome. 

Ann Blouin:

Thank you. 

Ivan Mitchell: 

Good to be here.

Daniel J. Marino:

So I think maybe we can. We can start with you as you reflect back on 2023. Talk a little bit about what you see are some of the things that have been really important to you and to your team. And have you worked with your board to kind of navigate through some of the challenges within your market. You know, you're in the rural health space. There's been obviously some challenges that you've had, but some opportunities that you've been able to achieve. Talk a little bit about that working relationship with your board.

Ivan Mitchell:

Well, we're very lucky. Here is an independent nonprofit organization that's locally owned and operated. We just have We got great board engagements.as you've said, we've had some real challenging times in healthcare recently. And so I think that from the management perspective, We've tried to do our best to help our board understand kind of what's going on. You know, sharing that in in 2022 over 50% of hospitals lost money and just kind of some of the challenges that we have with the workforce. Medicare advantage some of the pay or mix changes and transitions. And so I think it's important for leadership teams to keep their board up to date on what's going on in the industry. There were monthly flash reports that shared how hospital financials were doing and just making sure that that's out in front of your board, so that they can if you make a recommendation toward them that they have a good understanding of what's out there, and what the situations are that we're dealing with right now per second. 

Daniel J. Marino:

Yeah, no, I absolutely agree. I keep in the board engage and using them as a as a resource is key, and you've been on both sides of the fence, you you've been a a healthcare leader for a number of years. And now you're on, you know, at least 5 provider boards. What do you see as kind of the success, Or maybe the role of the board member in supporting the healthcare leaders. As we're navigating through these challenges.

Ann Blouin:

I think that's a great question, Dan, and I think Ivan sort of laid out the importance of board engagement. One of the biggest challenges I'm seeing in boards is being able to balance the focus on the short-term challenges, which are many, as you've pointed out in your article. And the longer term strategic planning, where does the organization want to go? It's tough to do strategic planning, Covid sort of put us all kind of gave us all a little slap across the face, and said, Holy cow! You know things are very different now. But the Board's role from a governance perspective is to help support management that do management but support management in their activities in the short-term challenges. Understand them Well, 140 pose appropriate questions, but never take the board's eye off the long-term strategic planning. 

Daniel J. Marino:

Right, So they're really incorporating them as a is almost a unified front right in the strategic planning process. So I want to, I want to focus our discussion today on what I see are 3 really key trends that we're going to have to work through in in 2024. I think the first one is really around Medicare advantage, we saw in in 2023 the biggest increase in Medicare advantage covered lives the biggest growth across the country, I think, you know, heading into 2024. about close to, you know, 55, maybe close to 60% of Medicare eligible patients are eligible. Beneficiaries are involved in some Medicare advantage plan. The second topic that I'd like to talk a little bit about is going to be around medical group financial performance and the impact on hospitals and health systems. And third is the transition and the growing focus on in in home care if you will.

But before we get to that, let's touch on Medicare advantage. Ivan, you know, within the rural community no secret. There's been a lot of challenges with Medicare advantage. Lot of articles A lot of research has been done. That kind of speaks to, you know, some of the quality opportunities that have come out of Medicare advantage contracts, but a lot of the a lot of the challenges that that's occurring. And for the most part those challenges have really been as a result of misalignment with the plans and creating a bit of a financial challenge for many of the hospitals. Where do you see Medicare advantage going in particularly rural healthcare as we move into 2024? 

Ivan Mitchell:

Great question. I think you've seen a lot of the renowned healthcare system start to make a change, and you see, Mayo Clinic withdraw from Medicare advantage contracts using scripts healthcare. So you know, all medicare advantage. And I think that's going to be a trend that you're going to see rural healthcare was kind of slow to adopt medicare advantage and good for them they should have been you know. Here we did end up adding to contracts. And we we're in network with 2 Medicare advantage plans, and we will be looking at options to exit the markets by the end of this year, if we possibly can. So that's I think we're getting out of it.

Daniel J. Marino:

Yeah. And there's a lot that are no, no doubt about that. Has the challenge been, from your perspective, has it been the reimbursement? I mean most of it is that medicare rates, anyways. Or has it been the administrative challenge? Has it been the lack of pre certifications? Do you feel like it's been more of an administrative burden on your physicians and your providers. Where can you, you know, maybe draw the biggest challenge from some of these medicare advantage contracts.

Ivan Mitchell:

Yeah, I think you're accurate. We administrate improvement. We have the Medicare advantage. Contracts will say we will pay you medicare rates. The data at our facility is the link with stay for Medicare advantage. Patient is 2 days longer than a traditional Medicare patient. So if you go from an average length to stay from 4 days to 6 days. Medicare pays what's called a Drg. A diagnosis related group. I just increased my cost by 50%, and I decreased my capacity and access. Along with that, you know, you lose money on Medicare patients, anyway, 80 to 85% of the costs. So what you've done is you've taken a kind of a safety net program, and you've added all of the bad behaviors of the insurance company into a program that doesn't meet your costs. And so it is. It has been a drain on us and, as you said, the incentives are aligned and we've seen very poor behavior from the insurance industry, and I don't. I don't see that changing.  

Daniel J. Marino:

Yeah, no, I agree with you. I think we're gonna continue to see more and more health systems back out of of medicare advantage contracts. And it's it's gonna be interesting to watch, too, because Cms sees Medicare advantage as a big initiative. They want to get out of the the the position or out of the the the place of managing a lot of the Medicare beneficiaries. And from a board perspective, though I think it it, I don't know what are what are your thoughts. It seems to me. It kind of puts the board at the difficult position because they have relationships with the community. You want to take care of these Medicare patients. But yet you've got this fiduciary responsibility to the hospital. 

Ann Blouin:

Yeah, I think there are 3 areas from a governance or a board perspective that the board needs to be thoughtful around. One is from a patient serving the community. There are a large number of people that when they sign up for Medicare advantage they either just pay attention to the TV ads, or they look at the price, and they look at everything being included. You know, it sounds so good from a cost perspective and out-of-pocket cost. And so people don't realize when they sign up for medicare advantage exactly what they're getting and what they would not be getting compared to traditional medicare fee for service. And it's a complex thing that that, frankly, is not very well understood and explained to the to the average person in the community. So that's one area is the disappointment and confusion that people have.  

The second area is from a legislative standpoint. State and local government officials, I think, can be called upon to Ivan's point to try to leverage, to understand fairness and equity in payment structures. Because the problem is that if you're losing money on every single Medicare advantage you can see why Mayo and others, want to, you know, get out of it. So leveraging relationships with local legislators, I think, is one strategy the Board can adapt.  

And then, thirdly. I think that a careful understanding of what will happen with people who are in Medicare advantage plans from the Board's perspective. What happens to those community members? Do they are they able to get back into a Medicare plan. How do they do that? It's not. It's not something that's easy to do. So there's some mechanical pieces that I think obviously the health system gets stuck with frankly, the denials of claims are very significant, and to Ivan's point consumes a lot of administrative time.  

Daniel J. Marino:

A lot of administrative time, and, like, you know, as you both mentioned, you don't make a high margin Medicare patients, anyways, in some cases it's even a loss. So when you have the merge administrative burdens that it even makes it a little bit more challenging.  

If you're just tuning in, I am Daniel Marino, you're listening to value based care insights. I am here today talking with Ivan Mitchell, CEO of Great Plains Health, and Ann Blouin, board member of many health of many boards provided boards. We are talking about the importance of effective governance, and navigating some of the headwinds or the challenges that we see in in 2024. It kind of building on Medicare advantage, and the challenges with or the implications to the financial performance of hospitals and health systems.  

Another trend that we're going to see in 2024 is the continued obviously employment of physicians by hospitals, maybe even by private equity and the competition with private equity. But hospitals, they're going to continue to look at the financial performance of their employee medical group. Many hospitals in 2022, 2023, focused on tightening their belt right reducing some of their cost structure, trying to right size the ship, so to speak. There certainly was a focus in 2023 about improving that financial performance. And we feel it's going to continue as we move into this new year, Ivan, when you think about where your group is, and maybe other rural healthcare providers as your employing physicians that are part of your community. Where do you think the biggest opportunity is, is it in maybe the compensation structure? Is it in renegotiating? Some of your professional payer contracts? Is it maybe creating access and efficiencies for your physicians and any anything that you can draw on.

Ivan Mitchell:

Yeah, this is challenging topic. I think that we talked about how Medicare advantage had misaligned incentives. And so I think the key with your physicians is, you need to make sure that your incentives are aligned. I think, ensuring that I know that the position has kind of a panel. a seat at the table, but you know, if the hospital does well, they do well and have some performance based incentives hooked into that. And I've noticed every time we've done that here with our physicians, you know, we'll typically bring them on a guarantee for so many years. And after that practice is built up. When we do a production quality incentive. Every time we move someone into a position to where our incentives are aligned, that that behavior follows. And so I think that's always the best opportunity, I think, of the medical group side. You know, we have a real labor issue, and you know we II don't know the country that you look at how many people try to get into medical school. They can't get into medical school, and the amount of under supply that we have with physicians. I shared that I worked at healthcare.  

Rob Allen was the regional VP of the time. He's currently the CEO of the Company, and I was listening to a to a podcast he was on. And he said that they're in Idaho, Utah, Nevada, and Colorado, Montana. You said, if in around healthcare hires, every single medical graduate from those 4 States or 5 States. it will not replace the supply of those positions that will be retiring. And you know, in around healthcare. They're in Colorado. You have UC health, you have banner. You have all these other organizations that are there. So I think the financial performance of simple, simple economics supply and demand. We're going to see some additional foreign trained doctors that we need to recruit hopefully. That will increase. But it is very frustrating. You have your best paying jobs in your country. We are feeling and scenario that we have in place, and I think the financial performance is going to continue to deteriorate. 

Daniel J. Marino:

Yeah, great point. And I've spoke many times about the lack of supply. Absolutely. It's contributed to access challenges that we've had, you know. I'm sure, in your organization as well. But I'd love your point on aligning incentives, and I'm a firm believer of that right. Have physicians at the table partner with the physicians, create a structure that aligns the incentives. Ann, when you, when you think about it from a from a board perspective. Talk a little bit about that alignment. How could the board support? That Is it around, maybe supporting, creating that stronger alignment with the medical staff. Is it making sure that that physician leaders are integrated in in some form or fashion within the board structure. Any thoughts come to mind?

Ann Blouin:

Yeah, 3 areas one is, I totally agree with Ivan and you, Dan, on the alignment. And I think transparency in that alignment so that they understand exactly how they're being paid, what they're being compensated for, what the productivity standards are. I think that's critical, so that there isn't a feeling of secret secrecy, there is a feeling of trust. 

Secondly, is, I do believe, physicians should be on boards. I think that having a physician, one or 2 physician representatives on a board depending upon the size of the board. who are well respected in the community. I think that is a critical aspect of that alignment and trust and developing respect. 

And then the third area is, the board can help by asking questions around. How can we reduce the hassle for physicians, administrative hassle the managed care documentation hassle that physicians experience. Obviously lots of health systems have begun to use more effectively advanced practice providers, physician assistants and nurse practitioners to expand. The physicians reach and effectiveness and have those advanced practice providers see lower acuity patients, so the physician can concentrate his or her efforts on higher acuity activities. That makes a lot of sense. I think use of telehealth is a is a question the Board should be raising in areas, as Ivan points out, like psychiatry. Where there are, there is a critical nationwide shortage of psychiatrists, and has been for a long time. So I think, not only looking at the supply side, but looking at the demand side. What can we do? As people are aging as the baby boomers are getting older and older and need more physician services. What can we do to assist with that demand? In addition to continuing the recruitment and retention activities on the supply side.  

Daniel J. Marino:

Yeah, I agree with you. I think you know, as we pointed out. The supply of physicians of providers in general. I think we're a long way from increasing that supply in order to meet the demand. So the only way that we're really going to be able to do that is is, we have to incorporate innovation. We have to incorporate technologies. Frankly, we have to change the care model right? That is, allowing us to think a little bit more innovative on how we can deliver the right level of care to patients.  

Which kind of brings us to my third topic. Then in in 2023, of course, artificial intelligence, the increase in technology it has, it's created, you know, different types of care models expanded the care models, incorporated technology into the care models. We saw reasonable growth of home based care. That would allow us to kind of manage through some of these challenges. I I believe, as we look into 2024, and certainly related to the aging baby boomers and some of the requirements that they want in their own care and the delivery of that. I think we're going to see things like, you know, sniffs it at the home hospital at the home different types of models that will incorporate different care delivery systems if you will, different technologies and so forth. Ivan is as as a hospital health system leader. Where are you in in in that level of thinking? Is that part of your strategic planning process? Is it? Is it something that you're kind of, you know, taking a wait and see based on the needs of your community. What are your thoughts there? 

Ivan Mitchell:

Yeah, I think you're going to see. And moving healthcare to home base care. And II think you've already seen that just from the inpatient to outpatient transition, you know, surgeries where people used to stay a week and go home same day, and really taking care of by their families. So I think you've already seen kind of a transition going that direction. We at Great plains health we had until this year we have home health and hospice. As well as home medical equipment under our umbrella. We still have home medical equipment. We ended up partnering with a company, another nonprofit called better health. They run nursing homes, and we actually transfer our home health and most hospice services over to them. Over the last 10 years we had lost about $300,000 a year in front of the Hospice. You know, it's a small team, 16 people you have one biller. When that biller turns over it's it's a totally different billing model. And it's very unique. 

Daniel J. Marino:

So home health Hospice care. I mean, that's it's very specialized, if you will. So yeah, that makes sense. But I but I also feel like it has to be integrated. Right has to be almost a transparent component of your care model. So you're not necessarily seeing the challenges with readmissions, and you know, over utilization of the emergency room, there's a smooth transition from a queue to the post, acute and to the home environment.

Ivan Mitchell:

Yeah, I agree. You know, we were pretty selective with our partner. I've seen places sell to venture capital. The united healthcare. Some of these other areas, and it kind of seems like their model was taking a loss on home to get them on Medicare advantage plans or or things. So anything you're going to see it. We have seen a lot of health systems do the hospital at home model. You know. And I think you're going to probably see some success there. Most of the hospital at home programs have not been extremely successful. They've been very low census. And you know, Haven't really done well at this point. But for us it's on our strategic plan. I think, that for organization our size. Our goal is to once we see best practices that are out there to partner and implement those as quick as we can. So that's kind of where we've gone. We think we found a a good partner for help, home, health, and hospital services. Well, and we'll keep our eyes open for the for the next transition best practices that are out there. 

Daniel J. Marino:

So, Ann, as you know, as as a nurse and as a former nursing leader. You know any any quick thoughts on home based care. You see, this is a good thing?

Ann Blouin:

Yeah, yes, I do. And I just was at. I'm on the I Chi Board Institute for Healthcare Improvement Board and went to an innovative session on hospital at home that was conducted by Kaiser Permanente, and Mayo, and it was fascinating. I don't think there's going to be a large super large volume of patients that will qualify for hospital at home. They are selective clinically, certain types of patients are better served, but they may be served in a sniff versus at home and during Covid, one of the boards I sit on, which is a skilled nursing facility Company and assisted living, actually took highly acute hospital patients to decant the emergency departments and the and the critical care units, and became much more acutely focused in the skilled nursing area, upskill and train. So I think there is something here. Cms is pushing us toward this as an industry, because they want to reduce costs. They have a you know they have an interesting perspective there, and their measurements are beginning to look at continuum based measures as opposed. You know, population-based as opposed to all acute care core measures. 

The last thing I'll say about that is that the board needs to understand may need an investment because hospital at home doesn't come without expenses associated with those support services. Whether that's supply chain, human resources. When you're in the hospital, you can reach around and grab another physician or nurse and get some things done very different. If you're in a home environment.  

Daniel J. Marino:

Sure, absolutely. Well, Ivan, Ann, this has been a great discussion, you know never long enough. II we certainly can talk for quite some time around a number of these issues. And but I think one of the key things is, as you both brought out. The importance of having the healthcare leaders working with their boards and the board supporting the healthcare organizations is just is just critical. It's going to be an interesting 2024. I'm looking forward to see how things move forward and where our industry goes. I want to wish you both a very happy and prosperous 2024. Thanks again for coming on the program. 

Ann Blouin:

Thank you.

Daniel J. Marino:

And for our listeners. I want to wish you all a healthy and prosperous 2024. And until our next insight. I am Daniel Marino, bringing you 30 min of value to your day. Take care.

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners