GE Healthcare Camden Group Insights Blog

2018 Healthcare Trends: Tough Challenges, Innovative Solutions

Posted by Matthew Smith on Jan 8, 2018 3:27:58 PM

New Opportunities to Control Costs, Improve Care, and Enhance the Patient Experience

By Laura Jacobs, MPH, Managing Principal, GE Healthcare Partners

Another year of unprecedented challenges lies ahead for the healthcare industry. Healthcare systems will grapple with continued financial performance pressures, while addressing an ongoing commitment to consumers and care delivery and experiencing opportunities to retool for the future.

Changing payer and consumer dynamics, along with an uncertain landscape will continue to present unprecedented challenges to the nation’s healthcare organizations. At the same time, innovation and technological advances present new approaches to tackle issues and move forward.

Trends and solutions expected to have greatest impact during 2018 include:

Financial Performance Pressures

Continued Payment Challenges. One of the greatest challenges to healthcare systems will continue into 2018: the unpredictability of health insurance and payment models. Uncertainty exists everywhere -- at the federal and state levels and with the Health Insurance Marketplace, as well as ways to fund Medicaid and manage Medicare costs. With rising prices and fewer products on the Exchange, some markets could experience a rise in the number of the uninsured. Additional dynamics, such as the high deductible plans and health savings accounts, mean that organizations need to carefully examine pricing practices and revenue cycle management processes. With 19 million people enrolled in Medicare Advantage programs (33 percent of total Medicare enrollment), the 8 percent growth experienced between 2016 and 2017 is expected to continue.

Evolving Payer Dynamics. Multiple factors will continue to put the squeeze on healthcare systems in the coming year:

  • The movement away from fee-for-service models will continue even though the Centers for Medicare and Medicare Services (CMS) has tapped the brakes on some value-based payment methods.
  • Pressure to reduce base rates on commercial contracts, coupled with success in Medicare’s value-based payment program, will require health systems to continue to find efficiencies through patient care redesign, utilizing high-value supplies and outsourced services, and considering performance-based contracts with vendors.
  • At the same time, many physicians will seek to participate in CMS alternative payment models, including ACOs, bundled payment and CPC+ that provide preferred treatment under the Medicare Access & CHIP Reauthorization Act of 2015 (“MACRA”).
  • The trend for health plans to utilize tiered provider networks will steer members to more cost-effective physician groups and hospitals.
  • Due to start-up costs and financial challenges, providers will be more cautious about starting their own health plans. Instead, they will seek co-branded health plan partnerships on insurance products to create greater consumer loyalty and market growth, and leverage the population health infrastructure of larger insurance companies.
  • As utilization is reduced, another consideration will move to the forefront: health systems can expect top-line revenue to decline unless a concerted effort is made to expand outpatient services and geographic presence.

Optimizing Capital Resources. Volume and price pressures will continue to strain operating margins and outstrip available resources due to organizations’ demands for capital to fund information and clinical technology, as well as expansion of outpatient facilities and replacement of aging facilities. Creative asset management could include evaluating leasing options, utilizing development partners and optimizing existing facilities. Additional solutions to explore:

  • Repurposing underutilized or older facilities to meet demand for post-acute, rehabilitation or behavioral health services.
  • Creating capacity command centers to leverage data and analytics to assure that health systems are effectively utilizing inpatient and outpatient facilities are becoming more common.
  • Using philanthropy to support capital needs for programs and facilities that may have minimal or no immediate financial returns, but are critical to improve health outcomes or provide a more patient-friendly environment.

Commitment to Consumers and Care Delivery

Focus on Seamless Patient Care. Managing transitions of care will continue to be a top priority for healthcare organizations in 2018. Rather than reviewing retrospective trends, there will be a move toward advanced analytics that predict potential disruptions in care delivery -- a journey that requires re-engineering and recalibrating the care team and the underlying support structure. Teams will be able to take real-time action to prevent issues and streamline the patient care experience. When properly executed, this results in a single care plan that follows the patient from ambulatory to inpatient setting; integrated care management systems to facilitate smooth transitions from the hospital to home or a post-acute venue; and next generation contact centers that assure that intra-health system referrals and transfers are efficient and user-friendly. In the end, patients truly become the focus of the healthcare delivery system.

Expanding Access through Technology. With companies like Apple, Google, and Amazon, as well as thousands of start-ups focused on innovative disruption, technology will continue to change the delivery of healthcare services and the way providers interact with patients. Virtual technology and telemedicine have made inroads, reducing the need for patients to be seen in a facility. Healthcare can now be provided at home, at work, across long distances and in traditional settings. These developments dovetail with consumer trends focused on mobile solutions, convenience, and on-demand services. To position organizations for future success and compete with emerging players, healthcare systems need to embrace innovation and consumer-centric service delivery and explore alliances with non-traditional partners.

Adopting the Next Wave of Technology. With robots, precision medicine, and 3-D printing coming of age, the future has arrived as these technologies leap from the academic environment into community healthcare settings. Robot-guided surgical procedures and bedside robots are no longer in the realm of science fiction. In addition, genetic advances are leading to precision or personalized medicine, based on an individual’s genetic profile. Targeted cancer therapy based on a tumor’s genetic make-up is increasingly available, and systems are expanding genetic profiling to provide early preventive treatment in a population health environment. An innovation in the manufacturing world, 3-D printing, is making headway into the healthcare arena through prosthetics and implants. While this innovation holds promise in the area of organ replacement, implementation is still remote.

Enhancing Community Connections. To produce better patient outcomes and gain greater control of utilization, health systems will look beyond the walls of their facilities into the communities they serve. There is increasing recognition that social determinants of health, such as socio-economic status, housing and nutrition, impact health status as much as or more than medical care for the general population. Behavioral health initiatives and forging relationships with community resources to help manage critical needs is becoming mandatory, particularly for organizations with high Medicaid and other underserved populations.

Opportunities to Retool for the Future

Continued Growth and Integration. With ongoing merger and acquisition activity expected through 2018, health systems will continue seeking ways to create greater efficiencies and demonstrate value to consumers. Solutions involve simplifying decision-making and governance, developing system-wide clinical operating structures, streamlining operations, and leveraging assets and information technology investments. Leaders will put mechanisms in place to instill best practices across the organization and management accountabilities will shift to emphasize system-wide performance. Many health systems will continue to coalesce the cultures, governance, and management of employed physician practices to create a more unified physician enterprise.

Optimizing Delivery through Digital Technology. Tremendous potential exists to optimize investments in digital technology. Organizations can leverage their digital ecosystem through advanced analytics and applications that can pull relevant, real-time, actionable data from all sources, leveraging it to make smart decisions about patient care and operational improvements. In addition, artificial intelligence and machine learning will provides ways to improve the productivity and focus of care teams. Continual innovation means that healthcare systems must determine where and how much to invest while maximizing applications across the enterprise.

Protecting People; Focusing on Joy. Unrelenting change creates stress for employees. To combat burnout and enhance recruitment and retention, organizations will focus on initiatives to provide support and demonstrate value to their most precious resource: the people who work for the system. Besides an integrated approach to recruitment, training/development, performance and productivity management, and cultural development, many organizations will redesign the roles of care teams to put “joy” back into the profession. Leadership development also will be crucial, particularly for clinical leaders to accelerate change and support succession planning.

2018 Healthcare Trends

Jacobs.jpgMs. Jacobs is managing principal at GE Healthcare Partners. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/ management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at

Topics: Trends, Laura Jacobs

Is Your Board Prepared for These 10 Trends?

Posted by Matthew Smith on Feb 6, 2017 12:53:13 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

Boards need to focus on healthcare delivery transformation — and keep their eyes peeled for changes in federal law

The past few years have been tumultuous for most health care organizations as payment models, competition, regulatory changes, clinical advances, digital and information technology, and workforce trends have created the need for rapid transformation in just about every area of healthcare delivery and management. Layer on top of that uncertainty about the future of the Affordable Care Act, and 2017 should be another watershed year for healthcare.

So, has your organization discussed and developed responses to these 10 trends?

1. An uncertain reimbursement landscape

The degree to which reimbursement models will change in 2017 remains uncertain. Given the recent double-digit rise in premiums on the ACA's Health Insurance Marketplace, or exchanges, and calls for the redesign of Medicaid and Medicare, as well as commercial insurance regulation, we should expect an active year of debate in the federal and state ranks. The move to fee for value and expectations for efficiency and data-driven outcomes are not likely to abate. Also likely to be encouraged is consumerism, with a greater focus on health savings accounts and health reimbursement accounts, high deductibles and price transparency.

What trustees should keep their eyes on: federal and state legislative and regulatory changes. Financial plans for 2018 and beyond must consider the impact of higher deductibles, possible increases in bad debt, and even greater transparency on price and outcomes. Expect payer-mix shifts as the health insurance landscape responds to federal (and state) legislative changes.

2. Payment models continue to shift to value

With Medicare as a bellwether, payment models are increasingly reliant on measures of performance (e.g., hospital-acquired conditions, readmissions, patient experience and quality scores). There is no indication that this movement will stop. Medicare Advantage plans are likely to continue to see double-digit growth in enrollment, and, in some cases, health plans may seek risk-based arrangements with providers for these products.

The Medicare Access and CHIP Reauthorization Act of 2015 will have significant effects on the physicians in your market. While the Centers for Medicare & Medicaid Services is allowing different paces of entry, the bottom line is that physician payment will increasingly be dependent upon quality, patient experience, use of electronic health records and resource utilization. This may be the last straw for some smaller practices that don’t have the infrastructure to report the required metrics. Even if your market hasn’t yet experienced risk-based (e.g., downside risk, capitation or percentage of premium) models, private commercial carriers are emulating many of the CMS models, including accountable care organizations, pay for performance and bundled payment.

The lines between payer and provider will continue to blur, as payers acquire or provide services to providers and providers become payers. In some markets, regional health systems have moved into the payer marketplace — often as a Medicare Advantage plan or a plan to cover the health system’s own employees — to create competition and affordable options for their consumer base. Some payers will be increasingly open to partnerships with providers in launching new health plan products or delivery models. We will also likely see more large, self-insured employers reach out to providers as employers seek performance-based payment models to drive lower total health costs and better outcomes.

Overall, one of the most difficult challenges for healthcare organizations in 2017 will be harmonizing population health strategies with the market’s movement to value-based payment; moving too fast or too slowly in this area will challenge financial performance. This, along with a general uncertainty in the health care marketplace, will require astute and nimble financial planning.

What trustees should keep their eyes on: payer trends and the organization’s payer mix; the health system’s payer strategy and readiness for (and results with) performance-based payment; initiatives to help physicians respond to MACRA requirements; potential partnerships with payers or large employers to offer new products.

3. Pressure to reduce costs

Hospitals in general have experienced relatively stable financial performance over the past year or two — for some, even better than expected. In many cases, this has been a function of fairly strong volume, particularly in outpatient services. But the marketplace is putting pressure on payers — and thereby providers — to further reduce costs.

With higher employment rates, coupled with expanded coverage for individuals through the ACA, yet continued primary care shortages, emergency department volume is high. This can put pressure on inpatient capacity, operating room schedules and care management resources.

Pressure to reduce costs because of lower rate increases from payers means that managing patient flow efficiently, and reducing variation through defined workflows and clinical protocols are both critically important for a health system if it wants to achieve or maintain financial sustainability. Ensuring that precious resources like hospital beds and operating rooms are optimally utilized is also important to avoid making potentially unnecessary capital outlays for new bed towers or surgery centers. Some leading hospitals are exploring capacity-command centers that combine systems-engineering principles, commonly seen in complex industries such as aviation and power, with predictive analytics to manage and optimize patient flow, safety and experience.

It also is critical that the health system physician enterprise, which in most cases operates at a loss, optimizes physician time and aligns compensation models with goals and population health strategies, as well as engages in rigorous clinical performance management.

What trustees should keep their eyes on: changes in volume; hospital costs (labor and nonlabor) compared with industry benchmarks; length of stay; episode of care (diagnosis-related group) costs compared with Medicare rates; performance benchmarks of employed-physician practices.

4. Creating 'systemness'  

Many health systems have grown in recent years — vertically, horizontally and geographically. The opportunities to create a seamless patient experience, achieve efficiencies, enhance access to capital, promote innovation and optimize population health management are among many of the reasons for this growth. To realize these goals requires the harmonization of multiple cultures, operating mechanisms, IT and approaches to governance. To accelerate “systemness,” some systems will move from a “holding company” model to a greater degree of integration — across governance, management and clinical systems. Creating a single brand experience for consumers and employees will require a systemwide articulation of and focus on every aspect of care delivery across the continuum, including clinical and administrative functions.  

What trustees should keep their eyes on: a well-defined health system vision and strategy that guide decision-making on growth and system development; a system integration plan that establishes a governance and management structure to reinforce the desired goals, culture and brand; a disciplined and focused approach to achieve desired efficiencies and clinical integration.

5. The consumer is king

Health care has traditionally not been very consumer-friendly. But with deductibles set to increase again in 2017, as well as new disrupters in both the digital and care delivery spaces, providers will have to pay closer attention to the consumer experience (beyond the “patient” experience). This means price transparency; access where, when and how the patient desires; quality reporting; a social media strategy; and digital outreach to create consumer awareness and loyalty. All these will be increasingly important in 2017 and beyond.

Patient-focused care must be more than a stated value. It must be actualized through physical space, logistics, communication and approach to care.

What trustees should keep their eyes on: market share measured by share of the population, not by use of inpatient beds; the health system’s branding and consumer strategy, including dealing with price and quality transparency and a consistent consumer experience across the continuum and locations.

6. Care everywhere

With the explosion of mobile technology, and applications for home and self-monitoring, not to mention the expansion of urgent care and retail care centers, 2017 will be another year of evolving care models. Private equity–backed as well as employer-backed new models for primary care and complex care, and digital tools will continue to proliferate. Health systems will have to decide whether to partner, adopt or compete with these new entities and models.

Telemedicine will be used increasingly not only for remote rural areas but for the convenience of consumers who would prefer not to leave their home or office for care. This means competition could come from anywhere accessible by smartphone. Home and self-monitoring will be used to help make care for the elderly and other patients with complex conditions more responsive, as well as avoid costly hospitalizations.

What trustees should keep their eyes on: your organization’s strategy for accessible care delivery, including the use of urgent care centers, retail clinics, employer-based clinics, mobile technology, telemedicine and home monitoring. Consider partnerships to accelerate market entry and success in new areas.

7. Analytic tools and digital medicine

Most health systems have implemented at least one electronic health record (some are on their second or third implementation) and also have invested in a plethora of other IT tools for finance, data warehousing, care management, predictive analytics, disease management, scheduling and so forth. The key in 2017 will not necessarily be what the next IT purchase should be (although there will be many of those still) but how these systems work together to optimize decision-making and forward-looking actions.

Having a clear data governance structure and system architecture focused on what operational and clinical outcomes are required will be essential. Furthermore, emerging artificial intelligence (e.g., IBM Watson) and the “internet of things” (digital equipment communicating with other equipment) will begin to change the roles and responsibilities of health care providers and team members as well as care pathways.

What trustees should keep their eyes on: creating a digital and analytics road map that optimizes systems and IT platforms already in place and identifies gaps to guide future purchases; understanding the role of artificial intelligence and digital equipment as health care delivery evolves.

8. Health care cost drivers

While inpatient and physician care still account for the majority of health care costs, pharmacy costs have been increasing at a faster pace than they have and will likely continue to do so in 2017.

Behavioral health will also come into increasing focus, because individuals with mental health disorders often have higher medical costs and greater use of emergency departments. Yet, reimbursement for behavioral health is generally poor, and access to providers is often lacking. This is a particular concern with the Medicaid and Medicaid/Medicare dual population, for whom behavioral health problems often are untreated and socioeconomic conditions such as lack of housing or nutrition can exacerbate health risks. The social determinants of health will be raised more frequently as factors to be considered in population health programs, requiring health systems to connect with community service organizations to drive better outcomes and better health for at-risk individuals.

What trustees should keep their eyes on: your organization’s strategy for behavioral health; creating partnerships or relationships with community service providers as a means of improving the health status of the population.

9. Clinical advances will march forward

Precision medicine based on the genetic profile of an individual will be more accessible to more people but will still be used in only a minority of cases. Cancer care is the early adopter. But watch this trend — it could accelerate fast.

New 3D printers will enhance the ability to replace organs and tissues but will still largely be tested in research labs — for now.

Robotics will continue to be used in operating rooms but will also find a place at the bedside — for lifting or moving, or even interacting with, patients.

Mobile technology, as already noted, will continue to explode, enhancing the ease with which diagnosing, monitoring and treating patients occurs.

All this will require astute assessment by medical staff for the adoption of new approaches, and academic medical centers may find expanded opportunities to partner with community providers in the research and deployment of new clinical treatment options.

What trustees should keep their eyes on: medical staff policies and approaches to reviewing biotechnology and clinical protocols; understanding the role of emerging medical trends in key service lines.

10. Human capital needs are changing

In an industry in which labor costs still comprise the lion’s share of operating expenses, workforce management has always been paramount. Today, with the role of the health system changing as population health and value-based care models take center stage, the roles and responsibilities of clinicians and nonclinicians are also changing.

Generational differences demand different approaches and even policies in human resource management.

Health care workers, including clinicians and nonclinicians as well as the management team, are increasingly facing burnout due to constant change and ever-rising expectations.

New approaches to recruitment, talent development and training, workforce management, and engagement will be required to optimize your most valuable resource — your people.

What trustees should keep their eyes on: potential workforce shortages as unemployment rates continue to drop; understanding the organization’s workforce development and management plan and ensuring it is responsive to changing roles, responsibilities and expectations.

Strategic Planning in Uncertain Times

Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/ management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at 

Topics: Trends, Laura Jacobs

Top 10 Trends for 2017: Twists and Turns Ahead!

Posted by Matthew Smith on Jan 19, 2017 1:31:54 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

No one can say that the healthcare landscape is boring – and 2017 may be an especially interesting ride. Repeal/Replace? New transactions? Impact of digital? How will consumers behave? Who will the new disrupters be? How will population health models evolve? Who will merge with whom? The year will bring incremental changes in a variety of arenas, and it could deliver monumental shifts in other ways. Here’s how we size up the top trends and the related management imperatives to succeed:

1. Repeal, Replace, or Revise

The fate of the Affordable Care Act (ACA) is still uncertain, but regardless there will be changes to which healthcare organizations must respond. Major changes to Medicare, Medicaid, and individual coverage may not take effect in 2017, but financial planning will take heightened importance to identify potential scenarios for ensuing years. High deductible health plans and HSAs, price transparency, and continued focus on affordability will put pressure on providers to deliver value in order to win.

2. The March to Value Continues

Regardless of the specific changes that may come with changes to the ACA, payers (Medicare, Medicaid, employers, and commercial insurance carriers) will continue to seek ways to lower costs and improve the experience for patients. The Centers for Medicare & Medicaid Services (CMS) will continue to link payments to performance on a variety of outcomes (e.g. hospital-acquired conditions, readmits, value-based measures). The Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) will have significant impact on physician reimbursement, and as a result will galvanize integrated delivery systems, physician networks, and medical groups to implement efficient ways to demonstrate quality, patient experience, effective use of electronic medical records, and overall efficient resource utilization. Medicaid is moving to managed care in many markets, and commercial carriers and employers will continue to emulate many of the CMS payment models: ACOs, bundled payment, pay-for-performance.

The lines between payer and provider will continue to blur, as payers acquire or provide services to providers (note Optum’s [United Health Group] recent announcement of its purchase of Surgical Care Affiliates [SCA], a leading ambulatory surgery center and surgical hospital provider). With the expected growth of the Medicare Advantage market, providers will evaluate their role as partners or competitors with payers in this space. We expect to see more joint venture or partnership arrangements between payers and providers to launch new health plan products or delivery models. We will also likely see more large, self-insured employers reaching out to providers seeking performance-based payment models to drive lower overall health costs and better outcomes.

Harmonizing your population health strategies with your market’s pace of movement to value-based payment may be one of the most important strategies for your organization: moving too fast or too slowly could challenge both market position and financial performance.

3. The Cost Imperative

While value-based payment models require healthcare organizations to demonstrate quality and patient experience outcomes, the predominant focus is still on cost. With governmental budget pressure, employer pressure on commercial premiums, and in some markets highly consolidated payer dynamics, providers will continue to be challenged to reduce costs and find new efficiencies in the delivery of care. The focus for providers will be to redesign patient throughput, reduce variation through defined work flows and clinical protocols, and optimize use of existing facilities. Capital preservation will be as important as operating expense management to sustain or improve financial performance. Some leading hospitals are developing capacity command centers that combine systems engineering principles, commonly seen in industries such as aviation and power, with predictive analytics to manage and optimize patient flow, safety, and experience – and avoid costly outlays for new bed towers or surgery centers. Bottom line for healthcare leaders is that traditional ways of reducing costs (across the board spending cuts or layoffs) will not create the sustainable cost or quality advantages that will be necessary to succeed either in the short- or long-term. This means re-engineering the process of care across the continuum, engaging clinicians in every aspect of redesign, and imbedding a culture that supports effective change management become increasingly critical.

4. Let’s Make a Deal

Consolidation will continue across the industry. Payers will continue to consolidate as a result of continued premium pressures and the need to defray infrastructure costs. Provider transactions in every form will continue to be active in the year ahead: hospitals, surgery centers, physician groups, post-acute providers, population health “enablement” companies, technology companies , and others will come together in a variety of combinations. Organizations will seek partnerships to serve larger populations, acquire business expertise in a new area, and find efficiencies. With some organizations at a peak in their expansion or acquisition activity, 2017 will also be a critical time to focus on integrating the components that have been acquired or merged. Unless a concerted effort is put in place to identify, structure, and activate an integration plan that is designed to realize the intended goals, many organizations may find they have over-reached or cannot achieve the expected benefits of the expansion.

5. Consumerism Continues to Strengthen

Healthcare has traditionally not been very consumer-friendly (arcane billing practices and charges, hard to make appointments, fragmented care, access on the provider’s terms and so forth). But with deductibles that will increase again in 2017, as well as new disrupters in both the digital and care delivery space, providers must pay closer attention to the consumer experience – whether or not they have actually been a “patient” yet. This means price transparency, access where, when, and how the patient desires, quality reporting, a social media strategy, and digital outreach to create consumer awareness and loyalty will be increasingly important. Determining the definition and attributes (not just the logo) of the health system’s “brand” must carry through all venues of care, whether the consumer uses an app, a website, a phone, or an in-person visit to interact with the organization.

6. Care Everywhere

Care models will continue to evolve in 2017 thanks to the explosion of mobile technology, applications for home and self-monitoring, and the expansion of urgent care facilities and retail care centers. Private equity-backed as well as employer-backed new models for primary care, complex care, and digital tools will continue to proliferate. Telemedicine and “video-visits” will become more widely used – to improve access to complex care for remote areas as well as to provide greater convenience for consumers who would prefer not to leave their home or office for care. As an example, more than half of Kaiser Permanente’s patient visits are done virtually. Competitors will not be limited to those physically located near or in your service area; the new competitive dynamic will include those that can reach your population by cell phone or the internet. It will be imperative that management establish its access strategy and consider all of the tools available as care is being redesigned.

7. Capitalizing on Digital

After making significant investments in electronic medical records and a plethora of other information technology tools – financial systems, data warehousing, care management, predictive analytics, disease management, scheduling, and reporting among them – there’s a rallying cry to convert this mass of data points into actionable information. The call to action now is not necessarily what the next IT purchase will be, but how will the systems that have been purchased co-exist and even work with one another to optimize decision-making and forward-looking actions. The hospital, filled with “smart” equipment and systems, can be characterized now as a complex data “organism.” True transformation will come when organizations utilize artificial intelligence (AI) and the “internet of things” (digital systems “talking” to each other) to optimize patient flow, productivity, clinical decision-making, and the role of clinicians and other care team members.

8. “Outside the Box” Healthcare Cost Drivers

While inpatient and physician care still account for the majority of healthcare costs, pharmacy costs have been increasing at a faster pace, and will likely to continue to do so into 2017 and beyond. There is a rising focus on behavioral health, as individuals with mental health disorders often generate higher medical costs and greater use of emergency departments. With reimbursement for behavioral health still lagging, providers in this space will see increased demand, but will likely struggle financially unless avenues for reducing costs through care redesign or changes in reimbursement are effected. Population health programs will increase their focus on impacting the social determinants of health, as the impact that areas outside of healthcare (housing, nutrition, transportation) have on health status gains greater awareness. This will require health systems to determine how to optimize relationships with community service organizations to drive better outcomes and better health for at-risk individuals.

9. Clinical Advances Continue

Health systems such as Geisinger Health System are making headlines with their use of DNA sequencing on patients to help refine care protocols and interventions. We will see other examples of the expansion of precision medicine, using an individual’s genetic profile, although it will remain fairly limited in the near term. The Cancer Moonshot and other initiatives funded by the 21st Century Cures Act will provide an impetus for speeding up clinical advances and the introduction of new drugs in the years ahead. Watch for the use of robotics in situations both inside the operating room and at the bedside: lifting, moving, and even interacting with patients. Watch for 3D printing to augment the availability of organs for organ replacement. Academic medical centers and research institutes will have opportunities to partner with technology companies as well as community providers to explore and evaluate medical advances. Venture funding for monetizing intellectual property will continue to flow to those initiatives that make healthcare more cost effective and produce reliable outcomes.

10. Managing the Most Precious Resource

Human capital needs are changing. Workforce management is and will remain of paramount importance as the healthcare world evolves. With labor costs comprising the lion’s share of expenses, it makes sense from a purely financial perspective. But with today’s lower unemployment rate, and demand for many key roles in healthcare outstripping supply, healthcare organizations must prioritize workforce management as a cornerstone to change management and operational excellence. Generational differences demand different approaches and even policies in human resource management. Healthcare workers, including clinicians, non-clinicians, as well as the management team are increasingly facing burn-out due to constant change and ever-rising expectations. New approaches for recruitment, talent development and training, leadership coaching, and workforce management must be embraced as roles, responsibilities, and expectations evolve.

Managing an organization through these changes will not be any easier in 2017 than it was in the past years. Keeping an eye on the horizon, while staying attentive to the buffeting winds on all sides will allow healthcare leaders to maintain perspective and stay focused on making the tough decisions necessary to remain aloft. 

Strategic Planning in Uncertain Times

Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/ management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at


Topics: Affordable Care Act, Obamacare, Trends, Mergers & Acquisitions, Laura Jacobs, Healthcare Data Analytics, Healthcare Consumerism

Top 10 Considerations for Strategic Planning in Uncertain Times

Posted by Matthew Smith on Jan 3, 2017 2:19:57 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

Healthcare has entered a period where confusion and uncertainty will be the overarching context, where the performance challenges and financial pressures on organizations will mount, and where more constant and ever-present change will be the new normal. With healthcare policy, insurance coverage, and economics headed for change with a new administration, coupled with the already turbulent healthcare environment, many healthcare leaders are concerned about how to develop reliable strategies for the future. Is effective strategic and financial planning even possible with so many variables up in the air? Yes, and one could argue it is even more critical to have a clear path forward during unsettled times. Here are 10 considerations for strategic planning in times like these:

  1. Stay true to your mission and vision. When your organization established its mission and vision, they were meant to be statements of the long-term purpose and role of the organization. The mission describes why the organization exists, and the vision establishes the destination. While a changing environment may require adapting strategies or refining tactics and action steps, staying focused on the long-term destination is especially important when approaching headwinds. If a “refresh” of the vision is required, do so with a long-term lens, based on how your organization can best meet the intent of its mission.
  2. Don’t panic. This is not a time to allow inertia to overtake the organization. It could be helpful to re-evaluate the variables that could affect your results – Medicaid coverage, commercial insurance coverage, reimbursement rates, etc. – but many of these things won’t change overnight. Like an airline pilot encountering unexpected weather ahead, it is important to reassess your approach based on current information. But a lack of forward momentum can result in a mid-air “stall” for your organization – from which it could be hard to recover. Another reason to remain calm and adhere to the core principles of your organization and its mission.
  3. Focus on the “knowns.” While there are many things we don’t know about specific federal and state policy changes ahead, we do know many things that are unlikely to change. The imperative to reduce costs and deliver value and reliable outcomes, the aging of the population and the complexity of caring for multiple chronic conditions, rising consumer expectations for access and a better experience, the increasing number of disrupters that are poised to provide alternatives to traditional delivery, and the continued advancement of medical biotechnology and information technology are just a few of the trends that are not abating any time soon. Further, there will still be legacy competitors and new entrants in your market that will be striving to take market share and improve their position at your organization’s expense. Once you take stock of the things that are NOT changing, creating a strategic direction will be less daunting and will create the framework for moving forward.
  4. Engage all stakeholders. Most strategic planning processes include a method for obtaining input from the organization’s key stakeholders:  board members, medical staff, management, community members. In times like these, make sure that you have the pulse of employers, payers, and other healthcare entities with which you may interact such as FQHCs, post-acute providers, or behavioral health providers. Non-healthcare entities such as retail or technology providers may also provide good insight. Understanding the potential direction and actions that all related entities may take will allow you to have a more complete view of the variables for which you may need to be prepared. Furthermore, involving these parties in your planning process will enhance their ownership of the plan and their participation in its implementation.
  5. Refresh your financial plan. This is equivalent to checking your fuel gauge before take-off. With the possible need to divert your route, it is important to know the resources required and capacity to withstand downturns within your financial position. Be sure to take an objective view of your current state, including understanding the ability to withstand lower reimbursement rates, higher interest rates, or changes in payer mix. It may also be helpful to model the likely financial impact of federal and state policy changes on your organization, such as possible reductions in Medicaid coverage, should those come to pass.
  6. Conduct rigorous scenario planning. With an integrated strategic and financial planning process, your organization can “pressure test” various scenarios. The scenario planning will help evaluate the impact of various financial, marketplace, and other variables in your planning assumptions. This will help identify the areas of greatest risk, and prompt the identification of actions to mitigate those potential risks for inclusion in your strategic plan.
  7. Avoid “herd” mentality. Your strategic planning process must reflect yourorganization’s situation and mission. While it is important to learn about how others are responding to the current healthcare environment, it is also important to chart a path that is individualized for your organization. It is even more critical to identify how your organization will be distinctive, based on its culture, capabilities, resources, and current position. A strategic plan that defines how that distinctiveness will be cultivated and nurtured requires setting clear priorities and considering approaches that your competitors or those featured in industry journals may not have considered.
  8. Stay close to your market. Keeping an ear to the ground regarding local market conditions is especially important when so many variables have the potential to change. Are new disrupters – new delivery models, new technologies, new or growing competitors – making an impact in your market?  Are new payers or are local competitors changing the way they develop and pay their provider networks?  How is your state responding to changes that may be made to Medicaid or insurance exchanges?  Having knowledge of national trends is important to learn what could impact your market; being sensitive to local market conditions will allow your organization to apply those learnings in a meaningful way.
  9. Develop an organizational navigation system. While the strategic plan will provide clarity on the goals and priorities for the organization given the assumptions and expectations made at the time, it is also important that the planning process consider how the organization will absorb information and create alerts when a new route may be required. Just as your GPS system can provide alerts when there are traffic situations ahead and suggest alternative routes, your organization must develop its own ability to respond to changing conditions and still get to the desired destination.   Some organizations have found that having a “rolling” strategic planning process, that allows the plan to be refreshed each year, is the best way to keep the roadmap current. Keeping the strategic plan front and center as part of board discussions will also assure that you are continuously testing assumptions and assuring the relevancy of your plans.
  10. Communicate and activate the plan. In uncertain times, it is ever more important to assure that the strategic plan is well understood throughout the organization. Demonstrating that leadership has considered all internal and external factors and developed a clear path forward will go far in building internal confidence and focus. The absence of a well-articulated and communicated plan raises the risk of an explosion of potentially conflicting initiatives, as nervous management or physician leaders react to uncertainty by taking matters into their own hands. The final step in the planning process must assure that the strategic plan is fully activated:  translated into management goals, including accountabilities and timeframes; integrated with the budgeting process; and is a cornerstone of board discussions.

In uncertain times, it is the most resilient and agile organizations that succeed. To create resilience requires having a solid foundation that a well thought and thoroughly constructed integrated strategic and financial plan provides. To optimize its effectiveness requires that the organization use the plan as it would a GPS navigation system:  know your destination, know the resources and capabilities available before you leave, be alert to changes in conditions ahead, make sure the driver and its passengers are aware of the route, and be agile and ready to make course corrections as new information is absorbed.

 Strategic Planning in Uncertain Times

Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at

Topics: Hospital Strategy, Laura Jacobs, Strategic Planning, Healthcare Strategy

The Patient Experience Report Card: Gauge Your Readiness

Posted by Matthew Smith on Aug 9, 2016 3:06:45 PM

By Jeff Gourdji, Partner, Prophet and Laura Jacobs, MPH, President, GE Healthcare Camden Group

There's probably no organization in the healthcare universe that isn't at least talking about patient experience. But after interviewing hundreds of them, from small providers to massive hospital systems, we've learned that most are still struggling to attain optimal performance. They want to make patients happy, but they are unable or unsure how to achieve consistent results.

They've got legitimate reasons for lagging behind: While they all know patient satisfaction is important, many are in merge-or-die mode, which comes with a host of regulatory scrutiny. More pressing problems, such as controlling the cost of care, are demanding top executives' attention. Almost all hospital CEOs say patient experience is on their radar, making it into the top-10 list of concerns. But it rarely cracks the top three.

Smart organizations know that has to change. As the competitive landscape shifts to a world of mega-systems, patient experience will provide one of the few ways to differentiate, and ultimately succeed.

To understand the state of patient experience, Prophet and GE Healthcare Camden Group conducted intensive research among healthcare executives and created a maturity model based on our findings. We learned that most organizations fall into four broad stages of performance, and there are steps to take to transition from one stage to the next. An honest appraisal of where an organization is now is the only way to get better.

To continue reading this article in its entirety at Becker's Hospital Review, please click the button below for immediate access:

Patient Experience

Topics: Patient Experience, Laura Jacobs, Prophet

Looking Ahead in 2016: Top 10 Trends in Healthcare

Posted by Matthew Smith on Jan 6, 2016 3:56:21 PM

By Laura P. Jacobs, M.P.H., President, GE Healthcare Camden Group

While some current trends will continue into 2016, keeping pace with local market changes will require foresight and nimble leadership. Watch for these potential change “accelerators” for 2016.

Consolidation The major payer consolidations likely will get ironed out during 2016. The degree to which your payer market is already highly concentrated will affect your payer strategy, but watch for additional consolidation and its potential effect. Furthermore, the Federal Trade Commission will continue to scrutinize provider consolidations, including hospital as well as medical group acquisitions. The degree to which any anticipated affiliations or acquisitions truly achieve consumer benefit in terms of efficiency, access and quality must be clearly demonstrated both pre- and post-merger.

Government, commercial payer and employer move to value-based payment  As illustrated by the Centers for Medicare & Medicaid Services' introduction of the Comprehensive Care for Joint Replacement model for Medicare, there is no predicting how quickly certain initiatives could strike your market. Also, employer direct contracting will pick up in some markets as employers introduce narrow networks to control costs better. These initiatives can radically change referral patterns and the need for effective population health management.

To continue reading this article in its entirety, please click the button below to immediately access the article on the Hospitals & Health Networks website.

2016 Healthcare Trends, GE Healthcare Camden Group

Topics: Trends, Laura Jacobs, Care Model Redesign, Value-Based Payments

Designing a Truly Integrated Healthcare System

Posted by Matthew Smith on Aug 12, 2015 3:18:01 PM

By Laura Jacobs, MPH, President, GE Healthcare Camden Group

Many healthcare organizations, in the name of integration, have acquired a collection of overlapping units that fail to achieve the intended goal of system development.

There are many reasons healthcare organizations are extending their reach horizontally and vertically. Consolidating resources for efficiency, expanding access points and market presence, adding resources to assist population health management, acquiring facilities for expansion or diversification, creating a means to recruit and retain physicians…the list goes on.

Leaders at many health systems are hoping their organizations will become integrated delivery systems, but they struggle to achieve the desired goals. While geographic and service expansion may occur, too often the resulting organization is a potpourri of entities — yielding neither integration nor efficient operations. Do any of the following scenarios sound familiar?

  • Acquired medical practices are not integrated with one another, let alone the hospitals with which they are affiliated.
  • Hospitals within the system have competing programs and duplicative capital requests (e.g., every hospital in the system has a cardiac surgery program).
  • Population health initiatives have not been integrated or may even compete with traditional operations (e.g., discharge planning, care management, hospitalist programs).
  • Post-acute programs are withering from lack of referrals from within the system.
  • Decision-making processes seem to take longer and fail to achieve buy-in; no one seems accountable for the resulting decision.
  • There is wide variation in performance across the system within the same business units, but no movement to spread best practices.

To avoid being a system in name only, healthcare organization leaders should undergo some intensive self-evaluation, and then take concrete steps to ensure that their organizations are, in fact, integrated.

Clarify the System Strategic Plan and Each Business Unit's Role in It

Even though there may be a perfectly fine strategic plan for the system, does each business unit have a clear mandate for how it will help to achieve it? For example, if the system seeks to evolve into a population health management enterprise, how will the employed physicians be engaged to lead the redesign of care models? What will the hospitals' payer strategy be? Does the physician recruitment plan for the hospitals support the needs of a physician network for population health management? Does the strategic plan require a restructuring of the system's portfolio of services, facilities and resources?

Ensuring that the representatives of each business unit play a part in the strategic planning process is a first step, but action plans and accountabilities within each business unit then must be articulated with respect to how they will contribute to the overall vision and goals.

Ensure that Operating Plans Have Been Unified within the System

Is there a systemwide information technology plan that considers all business units (hospitals, medical groups, post-acute care, system needs, etc.)? Are payer and pricing strategies integrated for each of these business units? Is the organization giving a uniform message to the market, or are the signals conflicting?

Consider key functions and determine whether they should be centralized, or at least standardized, for geographies and entities. While many traditional functions — finance, human resources, marketing, information technology, purchasing — already may be centralized into system functions, others may be proliferating around the system in different silos. Care management, physician recruitment, risk management, patient safety, and staff education and training are just a few functions that can benefit from integration within the system, and they are often not coordinated effectively.

Retool the Governance and Management Structure to Reflect a System Focus

One of the first things to evaluate is the effectiveness of the governance and management structure of the system. Is decision-making authority clear within the system? Is there a clear path for decisions to be made and then accountability assigned? Creating a governance structure that supports local involvement, yet doesn't bog down decision-making is a delicate balance.

One of the most critical ways to integrate clinical performance is to establish a clinical leadership governance model that oversees the physician enterprise, employed physicians, clinical standards and recruitment throughout the system. Creating horizontal clinical service-line leadership and accountability (e.g., cardiovascular service line leadership responsibilities that span the system) can promote performance improvement, achieve efficiencies, avoid capital and other resource duplication, and improve market capture.

Also consider the membership of governing boards and committees. The skills and experience necessary at the system level may be different from that of the past, if the organization has grown from a one- or two-hospital institution to a multidimensional system that spans the continuum of care. Ensuring that system governance has more than an acute care focus is critical if the rest of the organization is going to evolve and integrate. The same can be said for system management positions: Make sure that the roles necessary for systemwide leadership are a match for the capabilities of the individuals assigned.

Design Performance Measurement Tools to Foster Internal Benchmarking

Dashboard reports are now fairly common within healthcare organizations, but do yours allow comparisons within the system of key performance indicators? And are these internal benchmarks compared with external best practices? This will be important to ensure that "a rising tide lifts all boats," instead of just performing to the "mean" within your own setting. In addition to the performance reporting, having a structure in place that facilitates sharing of best practices and communication throughout the organization is just as important. Having "affinity groups" of individuals in similar positions in the system can help with communication and learning, not to mention breeding opportunity for collaboration.

Align Incentives to Support System Success and Accountability

How are executives compensated within the system? Is it solely based on the performance of their business unit? How do you expect a hospital executive to give up a profitable service line in the name of better resource allocation or system strategy if it means he or she will miss a financial target on which his or her compensation is based? Making sure that systemwide goals and incentives are just as powerful as local or business unit incentives is key if system strategies are to be achieved with any speed. Likewise, do physicians' incentives reach beyond individual productivity and include measures related to systemwide performance (e.g., population health metrics)? Balancing individual with system incentives is not simple or easy, but it is important to get all oars rowing in the same direction.

Leaders Must Drive Change

Inertia is a powerful thing and, left to its own devices, each hospital within a system, each physician practice, and each post-acute or other business unit will pursue activities that have produced success in the past. In addition, individuals who have held certain positions within those organizations will be reluctant to cede control, decision-making authority, resources or power as the system attempts to create a more unified entity. This is where leadership will meet its test: Are we willing to forge ahead, confront difficult situations, even consider losing people who have been with the organization for decades, to execute the new playbook required of truly integrated delivery systems?

To fly to the moon, we needed rocket scientists and risk-takers who were willing to collaborate as a team. We wouldn't have gotten there without a group of people with the vision, skill and commitment to achieve something that at times seemed impossible.

How will you take the parts you have assembled and build a healthcare system that will sustain itself into the "deep space" of the unknown future? Set the vision, structure the enterprise, assemble the team and measure performance to ensure that you're on the right path. Then hold on and stay focused — and don't be afraid to disassemble some parts to be sure those you retain fit together to create the vehicle that will propel you to your desired destination.

Ms. Jacobs is the President at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 25 years of experience in the areas of physician-hospital relationships, physician group development and management, performance improvement, healthcare strategic planning and marketing, physician compensation, and payer strategy. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at


Topics: Hospital Integration, Integrated Delivery Systems, Laura Jacobs

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