By Michelle Mader / Special to Healthcare Facilities Today

Healthcare leaders and strategy specialists face an industry that is constantly changing and they must develop ways to adapt. Near-term planning and successful strategy deployment with measurable goals are key to survival in today’s healthcare landscape. Some of the challenges for healthcare leaders stem from two current legislative drivers that negatively affect existing strategies.

The first is the changing face of hospital outpatient department (HOPD) reimbursement, including ambulatory services, such as imaging, that could be moved outside the hospital to another facility to avoid the costs associated with higher overhead in a hospital but would be reimbursed at a lower rate.

Healthcare leaders want to maximize financially advantageous HOPDs as much as possible, but the government is slowly rolling back HOPD status. This creates a strategic challenge when hospitals have financially planned to heavily incorporate HOPDs but suddenly have to change course. Without knowing the timeline for HOPD rollback, it is difficult to determine the ROI on their ambulatory networks, how much to invest, and where to build and how to classify them.

The other major legislative challenge for healthcare leaders is the totally different approach to healthcare reform between the Obama and Trump administrations. During the Obama era, healthcare leaders invested in strategies toward what the government was promoting, many of which have been slowed or stopped under the new administration.

These strategies were several years in the making, and many providers had taken losses that they planned to recoup under capitated payment structures as part of the Affordable Care Act. These providers had invested in physician acquisitions to provide population health, employing them at a loss temporarily. The plan was to recoup those losses under the capitated payment system but the uncertainty of changing healthcare policies from Washington makes it difficult to plan and implement strategy.

And, these are just two legislative challenges among an array of difficult market-driven drivers for leaders to navigate regarding strategy.

Consider a scenario

A case scenario demonstrates successes and challenges leaders face with strategy. A hospital system had a strategy to increase its ambulatory network. The market was saturated with independent primary care physicians. The strategy was to bring these independent PCPs under the umbrella of the larger network, while the other major health system in town was doing likewise, so speed was a factor.

The hospital system appealed to physicians with attractive salary and benefits packages. Over a period of about two years, the two major health systems had recruited most of the existing general practitioners in the local market. They were clear and concise about who they wanted to recruit, pursued them, and quickly signed them into their system.

Interestingly, a myopic focus on the first phase can result in confusion about where to go next. In this case, there had been limited strategizing about where best to locate the new physicians and how to deal with the buildings/leases for their existing practices. The hospital network had plans to bring them into a wider network with more patient access, referrals, and a synergy of specialties, but they hadn’t worked out details.

The best way to avoid a situation like this is to explore market needs and strategize the bigger picture, looking at tactical deployment and trying to anticipate what will happen when the network is successfully enhanced through the recruitment efforts.

Planning can provide all the resources needed—labs, strategic adjacencies and complimentary competencies—at locations that make sense. If not, physicians who were happy with the package used to recruit them may be asked to move or change their schedules, which can cause dissatisfaction when the terms of the original agreement change. The key is to plan for what will happen when the recruitment efforts are successful, not if they are.

Here are six insightful considerations for even the savviest healthcare leader.

Six considerations:

Take early planning steps

Leaders who are contemplating such a change can take some early planning steps to ensure successful deployment of the strategy. In this case, to secure the network, leaders should start the recruiting process with a decision tree even before talking to doctors. It is important to look at success as an eventuality and plan accordingly due to the rapid nature of this type of consolidation effort. Ask what the implications of success or failure would be and make a plan of what to discuss when recruiting physicians.

At this stage, there is not much detail planning, but this type of strategy does require awareness, contingency planning, and clear tracking of progress to keep the focus where it needs to be. The decision tree is about managing expectations in advance, rather than coming in cold and dealing with the fallout if there is confusion or dissatisfaction. The decision tree focuses on how to handle the results of the transition when the early efforts are successful.

To ensure successful management, assign monitors/task force to:

• Keep track of the progress

• Deal with questions and new considerations if success comes quickly

• Analyze what is not going well if the effort is not immediately successful

The key is to be nimble and flexible, examining market needs to drive planning. The decision tree should be fluid and ready to be reprioritized at a moment’s notice, with early adopters placed higher and those who are less responsive in lower priority positions, but ready to move at any time if they suddenly become amenable to acquisition.

Look at the big picture

The biggest factor for healthcare leaders and strategists is that their success or failure is dependent on their ability to look at the big picture, understand all the tangible and intangible impacts and attributes of a particular strategy, and how it all fits together into a plan.

If the focus becomes too granular, they may overlook something major while focusing on a relatively insignificant issue. For rapid deployment, they must have ready answers for what needs to be done with assets, doctors, and patients, to execute the strategy to realize the larger vision.

In looking at all the variables in the big picture, leaders can understand that there are some circumstances that may be less than ideal, even when the overall strategy is a net positive.

Get the right people on board 

Getting the right people on board involves more than just the right combination of experience. Those in leadership roles must be on board with the overall vision of the project if they are to execute the strategy successfully, even when that vision is not in precise alignment with their own agenda.

For example, if the goal is to downsize or close a facility to save funds when it is operating at a loss, the executive in charge of the project must align with that agenda, even if it would have a negative impact in the community and be politically unpopular.

Or, perhaps a CEO in charge of a consolidation or reduction effort decides instead to try and “save” the hospital by whatever means necessary, the results may run counter to the overall vision.

In the case of a facility that is operating at a loss, it’s likely that leaders have already examined all options for keeping it running as a viable, contributing entity, but have determined that it is not worth the investment.

Leaders who are planning for these types of strategy executions can take some precautions to avoid appointing someone who will put his or her agenda ahead of the project.

To evaluate candidates, articulate the vision and ask candidates for the tactics they would employ to bring that strategy to bear. When leaders lay out their vision and strategy, they don’t always create a picture of what the end game looks like, with benchmarks to measure against.

Without that insight, it is difficult for teams, subordinates, and peers to create a road map. Deploying a tangible, quantifiable picture could be as simple as increasing patient satisfaction scores to 90% or lowering costs for patients by 5-10 percent. When the vision is clear and attainable—focused on a two-five year plan with quick, achievable wins—the strategies and implementation plans are better, and it’s easier to track success.

Outsource needed expertise

One of the biggest challenges for healthcare leaders is consult experts when dealing with issues outside the healthcare realm. Their expertise is in caring for patients, not setting up efficient IT infrastructure or negotiating real estate lease terms.

Leaders must anticipate those needs in advance and bring in experts to come up with holistic strategies.

In one example, a client partnered with university to build a large three-story medical office building (MOB) on their campus. The university owned the land but only had a 25 percent share in the MOB. The deal had been made several years ago and a 35-year lease term was in place, with high lease rates because there is a surgery center in the facility.

Part of the strategy was increasing the number of operating rooms from four to six, but the investment wasn’t entirely sound when the building did not belong completely to the client. Strategists asked whether the client wanted to continue pouring assets into the building with the current lease structure, and presented other options including building a competing MOB on campus, or negotiating with the university to lower rates, let the client buy out their stake, or otherwise make a more equitable deal.

The right expertise can save healthcare leaders significant dollars in ways they may never have considered.

Work on a small scale, focused on small wins

One of the keys to measurable success is to work on a smaller scale, with a series of reasonable, achievable goals that ensure small wins along the way. This approach lends itself to ambulatory environments more than acute, where timelines are longer.

The acute environment runs on a 24/7/365 model, and the volume may overshadow the bandwidth of staff to take on a strategic initiative of any size. Because it takes longer to implement change on the acute side, and even longer to get data results, ambulatory is the ideal environment to measure success or failure quickly.

Focusing on a manageable scale yields small wins regularly, which can be leveraged to build momentum for bigger wins.

Be real

Strategy experts endeavor to make projects successful and are not afraid to deliver challenging news or show results, whether or not they’re optimal. The goal is continuous improvement and project success. The successful achievement of that goal lies in the strength of the strategy and the plan for its successful execution.

Planning for success and being flexible in the face of shifting priorities and willing to seek outside expertise when needed are all key factors in successful deployment.

Michelle Mader, MBA, MHA, is the president of Catalyst, a provider of advisory services to healthcare executives.