Becker's Hospital Review

22 22 CEO/STRATEGY As Health Systems Take on More Risk, How Does Executive Recruiting Change? 4 Thoughts By Tamara Rosin T he growing momentum behind the transi- tion from volume- to value-based health- care has put certain leadership traits and competencies in greater demand for executives to successfully guide their organizations forward. On top of this shi, as the fate of key healthcare policies hang in the balance, leaders must be comfortable with risk and prepared to execute strategic plans in the face of uncertainty. e ability to deal with risk is important, as it is in- herent in many reimbursement models under value-based systems, such as bundled payments. Identifying and recruiting leaders who are equipped to deal with risk naturally affects executive recruiting and the strategies boards must use to find top talent. Here, Mark Mad- den, senior vice president of executive search at B.E. Smith, took the time to answer Becker's four questions on how a risk-based environ- ment influences executive recruiting. Note: Responses have been lightly edited for length and clarity. Question: As health systems take on more risk under value-based care deliv- ery models, how are boards changing their tactics for executive recruiting? Mark Madden: is is a sensitive area for boards because they have increased accountability for the leader's performance and the stakes are high- er now for organizations. Because there is more risk in the industry, boards have to open up their guidelines for determining the necessary com- petencies and experience. If you're only going to look for the traits of the traditional healthcare leader, you're probably not going to end up with the leader who will help you manage risk. Boards must broaden their expectations, and in some cases consider candidates who come from out- side the healthcare industry. Q: What traits or competencies are most important for executives to pos- sess in a risk-based environment? MM: When you are working in a higher risk environment, leaders must be comfortable with risk, but also have the ability to distin- guish between good risk and bad risk. ey must also be transparent in their communica- tion and embrace change. Q: What aspects of executive recruit- ing worked in the past but are not suit- ed for organizations that plan on tak- ing on more risk? MM: As an executive search firm, we must broaden our focus when evaluating candi- dates. We can't be stuck on traditional candi- dates with traditional traits. If we're taking our jobs seriously, we must provide organizations with the best current leaders and future leaders — and they should be different and innovative. ey need to be appropriately disruptive. We must also reduce the risk associated with hir- ing new leaders through the use of technology. We now use new aspects of technology to allow our clients to get a deeper view of candidates and reduce their risk when they make an initial selections for interviews. Q: What is the most important thing for health system boards and leaders to be aware of as they recruit new leaders going forward? MM: Healthcare boards and leaders must be aware that it's a challenging workforce environ- ment. Our industry is changing and we're now dealing with a smaller workforce — there are fewer individuals that have enough passion to climb up the ladder. Many people are OK with being a staff level employee. ey don't want the stress of the C-suite because they want a better work-life balance. So boards must be aware it will take a substantial amount of time and re- sources to identify and recruit top talent. Furthermore, they must be aware that because there is limited talent out there, they must act fast. We've seen with many of our clients there is oen a long gap between identifying leader- ship candidates and engaging them for inter- viewing. Top talent doesn't stay on the mar- ket for very long, so you must move quickly. Taking too long also affects the organization's brand and people's willingness to work with them. People want quick decision makers. n Hospital Uncompensated Care Costs Fall to Lowest Level in 26 Years: 4 Things to Know By Ayla Ellison F rom 1990 through 2015, U.S. hospitals' uncompensat- ed care costs totaled $704.7 billion, according to a re- cent American Hospital Association report. To calculate a hospital's uncompensated care costs, the AHA combined the hospital's bad debt and financial assistance costs. The uncompensated care figure does not factor in Medicare or Medicaid underpayments or other contractual allowances. Using that formula, the AHA calculated national uncompensat- ed care costs from 1990 through 2015. Here are four things to know about hospital uncompensated care costs, according to the AHA report. 1. In 1990, total uncompensated care costs were $12.1 billion, representing 6 percent of total hospital expenses. 2. Although total uncompensated care costs steadily increased from 1990 to 2000, the costs consistently represented about 6 percent of total expenses. During that period, uncompensated care costs represented the smallest percent of total expenses in 1992 at 5.9 percent and the largest percent in 1999 at 6.2 per- cent. 3. From 2000 to 2015, national uncompensated care costs fluc- tuated, reaching a high of $45.9 billion in 2012, which represent- ed 6.1 percent of total expenses. 4. In 2015, total uncompensated care costs were $35.7 billion, representing 4.2 percent of total expenses — the lowest level in 26 years. n

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