Issue link: https://beckershealthcare.uberflip.com/i/731691
57 57 CEO/STRATEGY give or take, of intensive strategizing with con- sultants and countless promises of the next Uber of healthcare, many are rediscovering the basic principles that drive countless successful companies and household brands. New strate- gies may be exciting, but they also run of the risk of resonating less and less with what is go- ing on in the real world and what works. Like any human being, a CEO has potential to fall for the next bright shiny object. Chief executives must constantly exert energy in the form of dis- cipline. Sometimes it does take encounters with the wildly innovative and imaginative to make one again appreciate the tried, true and sensible rules that keep the core of the business healthy. 8. The impact of the cost of pharma- ceuticals and impact on healthcare costs for systems. As hospitals strive to provide high-quality care at a lower cost, CEOs of health systems across the country are con- cerned about skyrocketing drug prices. Fueled largely by spending for new medicines, partic- ularly specialty drugs, total prescription drug spending rose 12.2 percent in 2014, faster than the 2.4 percent growth in 2013, according to CMS. An analysis by Bloomberg Business of 3,000 brand-name prescription drugs revealed the price of 20 drugs had at least quadrupled since December 2014. Health system leaders are deploying a number of strategies to combat rising drug costs, in- cluding negotiating better prices based on uti- lization by joining a group purchasing organi- zation. A 2014 Healthcare Supply Chain study credited GPOs with cutting hospitals' costs by as much as 18 percent. GPOs are expected to reduce overall healthcare spending by up to $864.4 billion by 2022. 9. The competition with private equity for high-margin business. Private equity firms made a strong showing in the health- care market in 2015, and they're investing in lines that previously helped nonprofit systems' margins. Last year, $23.1 billion was report- edly invested in healthcare by private equity funds. Although that number is down slightly from $29.6 billion in 2014, the number of deals worth $1 billion or more grew from five in 2014 to eight in 2015, according to Bain & Co. As health systems remain focused on inorganic growth opportunities and PE firms shi capital to healthcare, competition for assets that offer high reimbursement potential, such as medi- cal groups that specialize in pain management, will continue. is trend will likely lead more hospital CEOs to consider partnerships with PE buyers. 10. The pushing of procedures out of hospitals and the efforts to backfill. In 2015, a group of the largest for-profit hospital operators in the U.S. recorded increased inpa- tient admissions for the first time since 2008. Don't bet on that occurring again, Fitch analysts were quick to advise. "A repeat performance of positive growth is unlikely in 2016, since the improving economy and Affordable Care Act provided a li that can't overtake longer-term headwinds to growth, like pressure by payers to reduce short-stays and readmissions," Megan Neuburger, managing director with Fitch Rat- ings, said in a statement. Overall hospital demand is not expected to increase like it has in the past. What was fore- casted for years is beginning to noticeably play out at certain health systems. Improved care coordination and management is successfully keeping patients with chronic conditions out of the hospital, moving what was once appropri- ate for inpatient care to the outpatient or home setting. An Advisory Board analysis in 2014 suggested aggressive population health man- agement efforts could reduce inpatient volume growth by more than 6 percentage points over 10 years. As a result, hospital and health system CEOs are put on a highwire act to work with their executive teams, boards, physicians and payers to cra a growth plan that accounts for this change in revenue. n There Are 4 Leadership Styles. What's Yours? By Tamara Rosin To be a great leader, one must first understand his or her own leadership qualities and tendencies. A leader must establish a personal definition of success. He or she must know how to rally co-workers, handle issues and react in the face of setbacks. One must identify how much advice and support to seek from others and how much to rely on their own ideas and experiences. To succeed, truly effective leaders know they need to understand how they lead, according to an article in the Harvard Business Re- view by William C. Taylor. Mr. Taylor, cofounder of Fast Company magazine and au- thor of Simply Brilliant: How Great Organizations Do Ordi- nary Things in Extraordinary Ways, posits there are four main styles of leadership. 1. The classic entrepreneur. To this type of person, "lead- ership is about the thrill of competition and the quest for success," according to Mr. Taylor. They value no-nonsense metrics such as costs, quality and profit margins. While these leaders are committed to their organization's values, financial returns matter the most. 2. The modern missionary. On top of striving for business success, these leaders want to achieve significance. "Suc- cess is less about making money than it is about making a difference and having an impact," Mr. Taylor wrote. These leaders may take risks that classic entrepreneurs would avoid or turn down deals others might accept because the financial reward isn't as important as the broader effect they hope to have. 3. The problem solver. These leaders "believe in the power of expertise and the value of experience," Mr. Taylor wrote. As they ascend the leadership ladder, problem solvers are always the first to face difficulties and find new opportuni- ties. While they rely on advice from colleagues and men- tors, they ultimately let their own experiences guide them forward. 4. The solution finder. A solution finder values incremen- tal results and solid solutions, but they also believe the most profound contributions often come from unexpected sources and people. They don't let what they know limit what they can imagine. "These modest, humble, self-effac- ing leaders don't make headlines, but that doesn't mean they're not ambitious," according to Mr. Taylor. "They be- lieve that humility in the service of ambition is the right mindset to do big things in a world of huge unknowns." n