Becker's Hospital Review

66 THOUGHT LEADERSHIP 8 Questions with Lynn Nicholas, CEO of Massachusetts Hospital Association By Tamara Rosin L ynn Nicholas, president and CEO of the Massachusetts Hospital Asso- ciation, is one of healthcare's most influential leaders. She has risen through the ranks of various leadership positions until joining MHA as chief executive in August 2007. By that time, she already had more than 35 years of hospital and association experience. Having previously served as execu- tive vice president and COO of the New Jersey Hospital Association and president and CEO of the Louisiana Hospital Asso- ciation, Ms. Nicholas possesses a range of leadership experience and capabilities. She is well versed in discussing the challenges and effects of the Affordable Care Act, as well as those stemming from state-based reform. Massachusetts had its own state reform law passed under former Governor Mitt Romney in 2006. Ms. Nicholas will be discussing these challenges in greater depth at Becker's Hospital Review Annual CEO Roundtable + CFO/CIO Roundtable this month in Chicago. Ms. Nicholas took the time to discuss what she expects to see in the next five years, potential effects of repealing the ACA, Massachusetts' healthcare market, her strategy for building a leadership team and the most memorable piece of advice she's ever received. Note: Interview has been lightly edited for length and clarity. Question: What do you think are some of the most significant challenges hospitals and health systems will face in the next five years? In your opinion, what do healthcare leaders need to do to combat these challenges? Lynn Nicholas: e biggest challenge is what I call 'straddling the fence.' While [hospitals] are trying to make the tran- sition away from fee-for-service and volume-driven healthcare to population health, the challenge is ensuring goals and incentives are aligned. When you're in one payment setting or the other, goals and incentives are usually the same, but when you're in the middle of the transition, it gets very confusing. Our members — hospitals in Massa- chusetts — want to see the transition to global payments, whether it be bundles, full capitation models or some kind of risk- based incentive payment. ey want that to happen yesterday. What compounds that transition phase is that Medicare and Med- icaid are growing every year as an overall percentage of payment to hospitals, but the actual payments per patient encounter are shrinking due to the ACA and the 2013 BBA Sequestration cuts, which will be in place for another nine years. at's a real challenge because commercial payment increasingly cannot make up for that dif- ference, when historically, it oen did. Hospitals need to integrate services and care delivery throughout the full con- tinuum and not just focus on the inpa- tient portion of care. ey need to do this through a full vertical integration, which may be an owned integration, or a virtual integration, in which they're dealing with providers that have contracts with aligned incentives. Another important strategy is to somehow, as hard as it may be, make the investments in health IT so hospitals can have EHRs that work across the continu- um of care. It's not just a matter of capi- tal investments — though these are large — but also dealing with cultural pushback and accepting a temporary decrease in effi- ciency. What happens is when systems bite the bullet and install a new sophisticated system, they initially see a decrease in pro- ductivity and satisfaction, but the EHR will pay off in the long run. Q: The U.S. will elect a new presi- dent in 2016. Most of the primary Republican candidates are conser- vatives and pledge to repeal and replace the ACA. If one of these candidates becomes president and takes action against the ACA, what are some of the repercus- sions healthcare organizations and Americans alike will experience? Do you think this is a likely out- come, and what is at stake here? LN: I hope this is just more continued blustering and posturing, and I think it would be a huge mistake if [the ACA were repealed]. I don't think it will [be], though, because the [Republican candi- dates] don't have a replacement strategy and consumers who have gained coverage will rebel. In terms of what's at stake, I don't think much would be affected here in Massachu- setts. Maybe we'd lose subsidized funding, so the cost of Medicaid to the common- wealth would go up, but providing health- care to all is hardwired in our health pol- icy. Massachusetts gave birth to the whole concept of universal coverage. A key part of the ACA — what holds everything to- gether — is the individual mandate. We had that before the ACA. I get to talk with 49 colleagues with the same role as me in the other states. In the states that have not expanded Medicaid or taken advantage of what the ACA has to offer — there is a growing and unfortunate divide between the haves and have-nots re- lated to healthcare access. If some folks can only get care in an emergency room and others have access to primary care and services, it's a health policy travesty. It's hard to believe we're the only industrialized nation that doesn't really have a comprehensive system from

• Cover