Becker's Spine Review

37 37 HEALTHCARE NEWS Health systems shrink executive teams as costs rise By Ayla Ellison H ospitals and health systems are facing financial challenges with many reporting rising expenses and significant investment losses in 2022. In 2022 is shaping up to be the worst year financially for hospitals and health systems since the beginning of the COVID-19 pandemic. Hospitals are reporting some of the worst margins since the pandemic began, and there isn't federal relief aid available to offset the damage, according to a report by Kaufman Hall. What are hospitals and health systems doing to improve their financial positions? Identifying ways to boost revenue cycle performance, scaling back services, and layoffs are a few ways healthcare organizations are trying to address financial challenges. A few health systems are streamlining their executive teams to cut costs. Providence, a 51-hospital system, announced in July that it is shrinking its leadership team and rolling out a new divisional structure. "Creating a more sustainable model of health care by 2025 has been a key part of our vision since before the pandemic," Providence CFO Greg Hoffman said in an Aug. 15 earnings release. "But it has become even more imperative today as health systems across the country face a new reality. Alongside our investments to simplify processes and modernize technology, streamlining our leadership and administrative structure is another way we will ensure we are operating as efficiently as possible, so that we can keep resources focused on direct patient care, especially for those who are most vulnerable." Providence, which has system offices in Renton, Wash., and Irvine, Calif., ended the first two quarters of in 2022 with an operating loss of $934 million, compared to an operating loss of $94 million in the same period a year earlier. Bend, Ore.-based St. Charles Health System eliminated two executive positions in July as part of a financial recovery plan. To cut costs, the system laid off its chief physician executive and senior vice president of improvement and strategy. The health system is also looking for other ways to reduce expenses and enhance revenue to improve operating performance, according to financial documents released in August. For the first six months of in 2022, St. Charles Health System reported an operating loss of $43.3 million, compared to operating income of $14.5 million in the same period a year earlier. n "Creating a more sustainable model of health care by 2025 has been a key part of our vision since before the pandemic. But it has become even more imperative today as health systems across the country face a new reality." Greg Hoffman, CEO of Providence "ere's an absolute hierarchy [in healthcare], and it doesn't require somebody to work in healthcare to recognize that when physician engagement falters, that impacts nurses, and when nurses don't feel engaged, that impacts the rest of the staff, whether it's ancillary staff, support services," he said. "ere's a trickledown effect to a lack of engagement at any part of the organization. Inevitably that impacts every position and is ultimately felt by those we serve." Additionally, he pointed to financial struggles at U.S. hospitals as a contributing factor for workloads increasing. On Aug. 29, Kaufman Hall released a new report that showed hospitals are experiencing some of the worst margins since the beginning of the COVID-19 pandemic. is means some organizations have had to implement layoffs and other cost-cutting measures. "Cost-cutting measures are becoming harder to accomplish without having a direct effect on the care patients receive. When [full-time equivalents] are affected, in many cases the responsibilities are shied to other members of the team. e additional responsibilities can lead to frustration and burnout and negatively impact employee engagement. ese factors are what then lead to quiet quitting," Mr. Sadlier said. To avoid quiet quitting or disengagement, he recommends that hospitals provide open and honest communication, set and maintain realistic work expectations, closely monitor employee engagement, recognize and reward high performance through options that extend beyond pay, and provide opportunities for career growth. At the same time, he acknowledged there's no absolute formula to identify disengagement at the individual level. "e more you round, the more that you spend time with your staff, the more likely you are to recognize changes in demeanor and perspective," Mr. Sadlier said. "e sooner you recognize it, the sooner you're able to have an influence on it. So that's where the regular engagement for leaders and supervisors has the biggest benefit — recognizing [disengagement] early and trying to find a way to reenergize and reengage staff." During an interview with Fortune, Katarina Berg, Spotify's chief human resources officer, said her company is working to avoid quiet quitting by encouraging a culture of trust where workers feel psychologically safe. Her advice for leaders is to talk about "the part of quiet quitting that has to do with people not [being] trusted, and they also don't trust their management team. erefore, they don't find any other resolution other than doing this type of very silent activism. So, I think with culture you always have to be proactive … and you have to be very deliberate and intentional." n

• Cover