Getting ahead of potential issues can help organizations avoid employee unrest and strengthen retention efforts.
In this episode of HL Shorts, Saline Memorial Hospital CEO Char Boulch shares initiatives for provider organizations to improve staff communication and workforce culture.
The agency's decision to terminate thousands of federal workers could put pressure on providers' finances and operations.
HHS has begun its seismic reorganization and the implications for providers are far-reaching.
The Trump administration's decision to lay off 10,000 full-time employees, consolidate HHS from 28 divisions to 15, and combine multiple agencies into a unified entity will have major ripple effects that impact hospitals and health system CEOs.
The Food and Drug Administration is cutting 3,500 jobs, the Centers for Disease Control and Prevention is losing 2,400 jobs, the National Institutes of Health is eliminating 1,200 jobs, and CMS is reducing 300 jobs.
Meanwhile, a new agency called the Administration for a Healthy America (AHA) will combine the Office of the Assistant Secretary for Health, the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration, the Agency for Toxic Substances and Disease Registry, and the National Institute for Occupational Safety and Health.
Providers may not feel the toll of the changes right away, but over time, these significant shifts in how HHS oversees healthcare in the country will result in more unpredictability.
Public health concern
The most worrisome potential effect of the HHS reorganization is the worsening of public health with fewer resources dedicated to keeping communities protected from sickness and diseases.
"Massive cuts to programs that prevent disease would make Americans sicker," former CDC director Tom Frieden wrote on X. "Cutting things isn’t likely to improve them. Actually improving takes expertise and investment."
A sicker public, as healthcare witnessed to an extreme extent during the COVID-19 pandemic, places more burden on hospitals to care for patients. It's not just about more patients being admitted to hospitals, but longer lengths of stay to care for sicker people.
Many hospitals are already dealing with high occupancy rates and a sicker population could accelerate a shortage of beds. According to a recent study published in JAMA Network Open, the average U.S. hospital occupancy rate is 11% higher after the pandemic and unless the hospitalization rate or staffed hospital bed supply changes, the national hospital occupancy rate will reach 85% by 2032, constituting a bed shortage.
Investing in more outpatient facilities would allow organizations to free up beds for patients that really need it and help keep hospital operations from being too bogged down.
Strain on workforce
Many providers are also working hard to keep their head above water when it comes to maintaining a sustainable workforce.
Healthcare workers were stretched thin during the pandemic and although turnover and retention rates have since stabilized, workforce challenges continue to be top of mind for hospital CEOs.
If public health declines, clinicians will be tasked with caring for more patients, potentially resulting in burnout and diminished work-life balance.
In a joint statement by the American College of Physicians, American Academy of Pediatrics, and the American College of Obstetricians and Gynecologists, the provider groups said: "Laying off over 20% of the HHS workforce will not make America healthier, but it will threaten our members’ ability to care for their patients at a time when we need to be strengthening the physician workforce and our national healthcare infrastructure as we confront a growing measles outbreak."
Hospital CEOs are already focused on improving recruitment and retention rates, but they should bolster efforts and prepare for a greater load on their workforce going forward. Investment in technology like generative AI can reduce the time clinicians spend on administrative tasks, allowing them to see more patients and have greater job satisfaction.
Even though CEOs can't fully anticipate how the administration and HHS will act in the foreseeable future, they must be proactive in planning for potential consequences to providers.
The health system has taken the contract dispute public while the two sides continue negotiations.
Jefferson Health took the bold step of going out of network with Cigna with the aim of strengthening its position with the payer.
The Philadelphia-based hospital operator is hoping that the potential loss of Cigna's commercial members will be offset by more favorable reimbursement rates in the long term if a new contract agreement can be reached.
Though Jefferson and Cigna split after more than 20 years together, they said that they will continue to negotiate.
Both sides, however, have criticized each other for the impasse. In announcing the split, Jefferson argued that it made the decision due to Cigna's reimbursement rates increasing by around 3% since 2020, compared to the hospital wage index going up by 20% over that period.
"Over the past five years, inflationary pressures have significantly increased the costs of healthcare related to labor, medical supplies, and operations," Edmund Pribitkin, MD, chief physician executive and president of Jefferson Medical Group, said in a video statement. "Cigna's reimbursement rates for commercial members have failed to keep pace with these economic realities, making it difficult to sustain high-quality care."
Cigna pushed back against the claims, with a spokesperson saying that "Jefferson Health chose to leave our network due to their unreasonable rate hike demands that would raise health costs for the people we serve. Almost all our employer clients' benefits plans are self-funded, which means any increase in cost of care is paid directly by local employers, their employees and their families."
In the meantime, emergency care at Jefferson remains in-network for all Cigna members, while some patients my qualify for programs to maintain in-network benefits.
By going public with the dispute and dropping Cigna, Jefferson is hoping to leverage public opinion against the insurer—a strategy some providers have employed to wrestle back some negotiating power.
Pribitkin and the announcement on Jefferson's website encouraged Cigna members to contact the payer directly to advocate for in-network access.
Sometimes, providers drop insurers with little desire of negotiating a new deal because the contracts are too onerous. That's particularly the case with Medicare Advantage plans, which more and more providers have recently shed to absolve themselves of the financial and operational challenges that come with the private program.
The strategy isn't without its drawbacks, such as isolating a segment of patients and losing revenue. It is, however, one of the few avenues providers can pursue to potentially balance the scales in the dynamic with payers.
A combination of policies in place and willingness from payers to be accountable is needed, says one hospital CEO.
In this episode of HL Shorts, Winona Health president and CEO Rachelle Schultz shares changes to Medicare Advantage that would make the private program more tenable for providers.
Saline Memorial Hospital's recently appointed CEO is utilizing her clinical perspective to improve staff development.
As the CEO of a hospital or health system, it's arguably never been more important to be able to see pain points through the eyes of your clinical and non-clinical staff.
With the workforce shortage continuing to plague organizations everywhere, having common ground with employees can allow leaders to approach areas like recruitment and retention through a valuable viewpoint.
That ability is giving Char Boulch a deeper understanding of how to guide Saline Memorial Hospital as CEO. Boulch took over the helm of the Benton, Arkansas-based hospital in February after serving as its CNO since 2023.
Her experience also includes other senior nursing leadership positions at various hospitals, as well as time spent as a patient access clerk, providing Boulch with a well-rounded perspective of what life is like across the hospital workforce.
"Starting at the ground level has given me a unique perspective into hospital operations and how decisions at the top affect the people who are directly impacted with the work," Boulch told HealthLeaders. "I’m passionate about driving positive change and making a difference in our patients and staff lives. The CEO position offers a perfect platform to do this."
Boulch believes that her tenure as a CNO specifically has set her up for success. The announcement of Boulch's appointment as CEO highlightedher impact as CNO on quality improvements like reducing preventable harm and increasing inpatient and acute rehabilitation admissions, along with her effect on furthering a culture of collaboration and innovation.
"As a CNO, I honed my ability to lead people and vision cast," Boulch said. "These skills are directly transferable to the CEO role, where strategic leadership and organizational efficiency are crucial. Moreover, my firsthand experience in clinical settings allows me to make informed decisions that prioritize both patient care and operational success."
Pictured: Char Boulch, CEO, Saline Memorial Hospital.
One of the areas that Boulch especially knows a thing or two about thanks to her nursing experience is how to attract and keep staff.
Though the workforce shortage in healthcare isn't at the heights it was during the pandemic, it remains a concern—for both now and the future. A report by Mercer consultancy found that the U.S. will have a shortage of over 100,000 critical workers by 2028, putting the onus on provider CEOs to be proactive in maintaining and strengthening their workforce.
Boulch wants to keep the focus on staff well-being and professional development opportunities to ensure her workers feel valued and supported. Some of the ways Saline is doing that is by providing a lavender room where employees can decompress and having 'Wellness Wednesdays' to designate a day for workers' welfare.
"Ultimately people want to feel valued and respected. That is key," Boulch said. "We have an employee engagement committee that addresses the question, 'how do we make sure our employees feel valued and respected,' and they come up with initiatives and ideas on how to ensure our staff receive recognition and understand how they contribute to the overall strategic vision for Saline."
Boulch may be settling into the CEO role, but her familiarity and understanding of the people she's leading is putting Saline in position to tackle essential challenges.
A new survey reveals how turnover in the workforce is trending and why executives are looking elsewhere.
Healthcare organizations aren't just contending with high levels of turnover with their clinical workers—they're also facing significant change among their leadership.
That level of change is expected to increase in the coming year with almost half of provider executives intending to leave their organizations, according to a survey by B.E. Smith, a division of staffing solutions company AMN Healthcare.
Responses were collected from 588 leaders, ranging from management to the C-suite, with 73% working in health systems and hospital, 10% in clinics/group practices, 3% in post-acute facilities, and 14% in urgent care centers, medical schools, and other care settings.
Forty-six percent of respondents said they plan to exit their organizations within the next 12 months, while 26% stated they would do so either immediately or within the next sixth months. Nearly three out of four leaders (74%) said they were approached with a job opportunity in the past six months, with 17% pursued it.
One of the reasons executives are having wandering eyes is the decline in job satisfaction. Seventy-nine percent said they were extremely or somewhat satisfied with their job, compared to 82% last year. Those identifying as extremely satisfied dropped from 38% to 32%.
Tenure is also a major factor in leaders' intention to leave. Respondents who had been with their current organization for more than 10 years were the least likely to consider exiting, while those with one to five years of tenure were the most likely to contemplate leaving.
To improve retention efforts and get executives to stay, organizations should target the factors that leaders value most, including organizational culture (44%), colleagues (39%), and compensation package (38%).
Fortifying the workforce and reducing turnover should improve the outlook of executives going forward. Currently, 34% of respondents expect the financial and operational conditions at their organizations to improve in 2024, with 48% expecting no change, and 18% anticipating conditions to worsen.
When it comes to the financial and operational conditions facing the industry, 30% expect conditions to be better, while 39% expect no change, and 30% expect them to be worse.
The nonprofit is changing up its management and administration positions, which could lead to some workers being laid off.
Yale New Haven Health is the latest health system to pursue restructuring with the aim of achieving greater efficiency.
The Connecticut-based hospital operator announced it will alter its management and administration roles as it works to "redefine and consolidate" its leadership team to "streamline decision-making and drive growth," a spokesperson for the organization said.
The changes will affect Yale New Haven Health's inpatient care and ambulatory operations, allowing it to be "nimble" in delivering care.
Though most impacted employees will have opportunities within the new structure, up to 38 people could be laid off in the process, according to the spokesperson for the health system, which operates five hospitals in Connecticut, New York and Rhode Island.
The health system also said in February that after three years of negotiations to close a deal with Prospect Medical Holdings for three Connecticut hospitals, the sale had become "impossible."
Prospect's alleged financial mismanagement derailed the $435 million transaction and is causing the bankrupt hospital operator to locate new buyers for the trio of facilities.
Meanwhile, Yale New Haven Health is joining several other health systems in restructuring, including Mass General Brigham and Providence.
Last month, Mass General Brigham announced it would conduct the largest layoffs in its history by cutting hundreds of management and administrative positions. The organization said it expects to save more than $200 million per year from the jobs cuts.
In the case of Providence, the Washington-based health system announced in January that it would restructure its executive team again under new CEO Erik Wexler. The streamlining included placing executive vice president Sara Vaezy in charge of AI strategy, digital health, innovation and sustainable partnerships.
As more health system grapple with the financial ramifications of rising expenses, trimming down leadership teams through restructuring can allow organizations to save on labor costs while realigning priorities.
Kaufman Hall's latest National Hospital Flash Report reveals that performance indicators are mostly holding steady.
As more patients received care to kick off the new year, expenses continued to rise, resulting in a balanced financial performance for hospitals in January, according to Kaufman Hall's National Hospital Flash Report.
The research, which draws on data from more than 1,300 hospitals nationwide, found that that the median monthly operating margin index for January was 8%, bringing the calendar-year-to-date figure up to 5.1%.
For the first time in one of its reports, Kaufman Hall included hospital margin performance with the inclusion of all allocations for the cost of shared services that they receive from their health system. Including all allocations, the median monthly and calendar-year-to-date operating margin index was 4.4%.
"January was a relatively stable month for hospitals, as more people received care due in part to seasonal challenges like flu and other respiratory diseases," Erik Swanson, senior vice president and data and analytics group leader with Kaufman Hall, said in a statement. "Hospitals are also experiencing more rapid revenue growth from inpatient than outpatient services. Expenses are also rising, driven primarily by drug costs, though the rate of cost growth has slowed."
In terms of volume, January saw month-over-month increases in discharges per calendar day (5%), adjusted discharges per calendar day (2%), equivalent patient days per calendar day (6%), adjusted patient days per calendar day (4%), average length of stay (2%), and operating room minutes per calendar day (2%).
More patients were treated in the hospital and emergency room, resulting in inpatient revenue growth outpacing outpatient revenue growth month-over-month on a per calendar day basis, 8% to 3%, respectively.
Net operating revenue per calendar day rose 1% from the previous month, while gross operating revenue per calendar day jumped 5% from December.
Expenses ticked up at a modest rate, with total expense per calendar day increasing 1% month-over-month, largely driven by 2% growth in labor expense per calendar day and 1% growth in drug expense per calendar day.
Medicare Advantage is exacerbating providers' financial and operational problems, making the current path almost untenable, say hospital CEOs.
In this week's HealthLeaders' The WInning Edge series, hospital CEOs Rachelle Schultz from Winona Health and Holly McCormack from Cottage Hospital share what strategies providers can use to hold their own against the challenges posed by Medicare Advantage plans.
Tune in to hear the panelists discuss the issues caused MA, as well as how leaders can approach contract negotiations with payers and advocate for reform.
Two hospital leaders share how providers can improve their standing in negotiations with Medicare Advantage payers.
Medicare Advantage payers may have most of the power in the dynamic with providers, but there are strategies the latter can utilize to create leverage.
In HealthLeaders' The Winning Edge for Battling Medicare Advantage, Cottage Hospital president and CEO Holly McCormack and Winona Health president and CEO Rachelle Schultz highlighted ways providers can improve the conditions of their Medicare Advantage contracts.
