Becker's Hospital Review

30 7TH ANNUAL MEETING RECAP 5 Thoughts on Navigating Healthcare's Future Landscape From Michael Dowling, Nancy Howell Agee, Barry Arbuckle, Ken Kaufman and Howard Dean By Ayla Ellison and Emily Rappleye M ore and more health systems are expanding into new and nontraditional business segments to remain competitive in today's healthcare market, whether that involves launching a health plan or striking partnerships with other organizations. e reasons health systems change their strategic direction vary, but many do so to address challenges in their market. From the physician shortage to ensuring a system has enough market share to stay competitive, there are a plethora of issues for healthcare leaders to consider. Although there are a number of challenges plaguing the industry, there is also a lot of positive change taking place. In a panel discussion at Becker's Hospital Review 7th Annual Meeting in Chicago moderated by Scott Becker, publisher of Becker's Healthcare, five great minds in healthcare offered their takes on some of the most pressing issues in healthcare and the strategies working best at their organizations. 1. Owning an insurance plan isn't the right choice for all systems. Great Neck, N.Y.-based Northwell Health, formerly North Shore-LIJ, launched its commercial health plan, CareConnect, in 2014. Although Northwell's insurance plan is young, it's doing quite well so far. e plan already has 100,000 members, according to Northwell President and CEO Michael Dowling. Regarding the choice to launch a health plan, Mr. Dowling said you can't be scared to disrupt the market. "Maybe in the long run it won't work, but we're going to give it a shot," he said. Fountain Valley, Calif.-based MemorialCare Health System has also jumped back into the insurance market aer watching a managed care plan it operated in the 80s grow into a multibillion dollar business — aer leaders sold it, convinced it was a passing fad. is time around MemorialCare is taking on risk slowly, conscious of its size compared to big commercial players, according to MemorialCare President and CEO Barry Arbuckle, PhD. Two years ago it acquired a small regional health plan in the Medicaid managed care space and began participating in the California Children's Services program for kids with chronic diseases. Now, the system is beginning to look into small group plans. "For us it was a strategic arrow in the quiver, and we will decide if it has a play in the future," Dr. Arbuckle said. Although 22-hospital Northwell and 6-hospital MemorialCare have had success with their plans so far, other systems haven't had the same experience. Roanoke, Va.-based Carilion Clinic President and CEO Nancy Howell Agee, RN, said her system has launched a health plan twice, and it was a failure on both occasions. "We lost our shirt" the second time, she said. Although Carilion isn't well suited for health plan ownership, the 7-hospital system did learn from its attempts. "It did help us learn a lot about ourselves and the insurance industry," said Ms. Agee. "We are looking at new ways to partner with insurers, and I think that is proving successful." 2. Systems should expand for the right reasons. When asked how many hospitals or sites of care systems need to be competitive, Mr. Dowling said it's not about how many you have; it's about what you do with them. "It's about creating an integrated continuum of care," he said. How many sites of care a system needs to compete is also situational. For instance, Mr. Dowling said a lot of Northwell's business comes from outside New York, making it important for the system to establish relationships with providers outside the state. However, Ken Kaufman, chair of consulting firm Kaufman Hall, offered a slightly different perspective. He believes health systems need to be much larger than their current size given that their future competitors will include companies like CVS, Walgreens and IBM. ese companies are worth $144 billion, $127 billion and $100 billion, respectively, while the largest healthcare provider, Oakland, Calif.- based Kaiser Permanente, is worth $44 billion, according to Mr. Kaufman. "at gives perspective on capital raising, cash flow and intellectual capital," Mr. Kaufman said. "You come to the conclusion pretty quickly that you have to be much bigger if you're going to have the same relevance you've had over the last 50 years, in the next 50 years." 3. Industry challenges are overshadowing major public health issues. A number of large public health issues, such as the water crisis in Flint, Mich., vaccine shortages, cybersecurity issues and enormous growth in autism and Alzheimer's rates have become more pressing issues for hospitals. "I don't think public health organizations are capable or even concerned about the public health issues our hospitals and health systems are facing," Ms. Agee said. In response, Howard Dean, MD, former chairman of the Democratic National Committee and former Governor of Vermont, said hospital systems are not equipped to deal with public health issues because they are still caught up trying to make the overall healthcare system work as fee-for-serivce medicine dies out. "Before we deal with public health, we have to make sure we have a system that works. I think these health systems [on the panel] are examples of ones that are headed in the right direction, but there are a lot of big systems that aren't," said Dr. Dean. He believes public health issues will have to be addressed in the private sector, adding, "It isn't about the hospital system, it's about the health system and public health is part of it." 4. Primary care is the future workforce's weakest point. "One of the most concerning things facing us is what the workforce looks like in the future," Ms. Agee said. She said her system is concerned about the future medical workforce being too small and whether individuals will be trained to work as team players. Despite what many people believe, the main issue future workforces face is not a physician shortage, according to Dr. Dean. Rather, it's a primary care shortage created by the growing burden of medical school debt. "You can never pay that back as an internist unless you are on Rodeo Drive or Fih Avenue. You are an indentured servant for the rest of you life," Dr. Dean said. "You can't buy a house. You can't get your kids through college. So nobody goes into primary care."

• Cover