Issue link: https://beckershealthcare.uberflip.com/i/789081
10 of UnitedHealth Group, and Surgical Care Affiliates, an ASC com- pany. is deal brings together in large part the largest payer in the country with one of the largest surgery center providers. I have two or three comments on this. First, SCA has brilliant leadership and we shouldn't underestimate the impact of this move. Second, the fact that Optum, which is part of UnitedHealth Group, is willing to acquire the largest surgery center chain shows how far they have come in no longer being held hostage by local hospitals and health systems. In the old days, even though payers wanted to work with outpatient provid- ers, they were very concerned because of the response their biggest supplier (hospitals) could have on their bottom line. Now, they seem to be willing to make a move. 4. Other Troubling Considerations. Here are five thoughts on trouble ahead. A. Hospitals are seeing lower inpatient days and lower procedures. B. At the same time they are seeing higher labor costs and the labor costs are hard to reduce. C. Hospitals can't reduce capacity easily. D. e impact of the movement and other issues are again leading to layoffs. E. Supply chain costs are oen harder to manage in the outpatient setting. 6. Answers. In terms of answers to these challenges, here are three thoughts. A. First, in the ideal situation a hospital can backfill in the capac- ity it has lost to outpatient. B. Second, more sites, whether as a large health system or large big box store, seems to not be the winning strategy. Expansion has the appearance for a period of time of giving the hospital lots of market reach. However, we have found with large health systems that more facilities does not equal more profit or necessarily mar- ket essentialism. C. ird, there is great opportunity is to be market dominant and market essential. At the same time this has to be done on a rational cost market platform. is seems to be the goal and the place for profitability for health and hospital systems. I.e., one must aim for dominance of market to be needed. 4. ASCs, Urgent Care, Spine, Telemedicine. Certain other examples of the movement to outpatient include: A. Surgery Centers. ere has been a movement of about 2,000 to 5,500 surgery centers over the last 15 years. At the same time over the last couple years the net growth in surgery centers has been next to zero. B. Urgent Care. On the urgent care side there has been a move- ment of 3,000 urgent care facilities to about 10,000 sites in a few years. is has been dramatic. C. Spine. On the spine side there has been a movement of about 45,000 procedures that are done outpatient to about 300,000 done in the outpatient setting per year. D. Telemedicine. Finally, telemedicine has also grown tremen- dously. is has been rumored to be almost approximately 50 per- cent of all Oakland, Calif.-based Kaiser Permanente's visits. e fascinating thing about Kaiser and the movement to the efficiency of telemedicine is that because Kaiser is also a major payer, they are responsible for total costs of the care they provide. Subsequently, they need to find ways to deliver care that is cheaper and more ef- ficient. us, the great adoption of telemedicine. Leadership. When we think about leadership, we think of seven things. 1. A leader must be passionate, engaged and excited. It doesn't mean that he or she needs to be rah-rah or that he or she has to microman- age. 2. A leader's greatest importance is oen building teams and setting direction. A great leader is known by the fact that he or she has devel- oped the next level of leadership. ere is nothing worse than a leader who has le the cupboard bare in terms of the next level of leadership. 3. A great leader must set clear goals and clear directions for a company. 4. We believe that great managers don't micromanage. ey have a very clear idea of what is going on and they have a clear sense and a finger on the pulse and they know what is going on but they don't micromanage. ey oen use what is called loose tight management. In essence they are very loose with terrific people where they need to be but tight in making sure things actually get done. 5. We find and we are a believer in this concept taken from an old Adrian Gostick book "leaders praise oen." ey use the concept that no one is invisible. is means that when somebody does something well they are recognized for it in some way. 6. Great leaders are not afraid to make hard personnel decisions. is doesn't mean that they quickly fire people, but they are very cau- tious in allowing bad people to fester in their organization. 7. A great leader is emotionally mature. Most people know each day which leader is "showing up". I.e., leaders' moods and behavior is consistent and predictable. A great leader possesses high emotional intelligence and is able to temper these things well. Very truly yours, Scott Becker