The Camden Group Foresees New Care Models Taking Hold As Healthcare Reform Advances Amid Sluggish Economy

Los Angeles, California, January 5, 2012—The fragile recovery, presidential election year, and expected pivotal Supreme Court decision regarding mandating health insurance coverage will serve as a challenging backdrop this year for healthcare providers as they make more tough decisions about their future and that of the communities they serve. Struggling with rising costs, limited access to capital, and soft patient volumes, hospitals and physicians will increasingly turn to new relationships, mergers, and alliances as they transition to fee-for-value, according to The Camden Group’s annual Top Trends in Healthcare in 2012.

“While these are unsettling times for healthcare, uncertainty cannot be an excuse for paralysis,” says Steven T. Valentine, president of The Camden Group. “The reality is that healthcare reform is locking into place on schedule, and we expect it to continue as presently configured. Preparing to accept and manage financial risk for a defined population is a core competency that providers must develop in the next three years.”

The Camden Group predicts the following top trends:

• Top 3 priorities for hospital CEOs will be cutting costs, driving volume, and hospital-physician alignment.
  • To survive, operating costs must drop by 10 to 20 percent in the next three to five years.
  • The key is capturing greater market share while per capita use-rates continue to slide.
  • With health plans making medical group acquisitions, other medical groups and hospitals will become nervous about potential change in ownership and disruption of referral patterns.
  • Employment is a top choice for physicians intent on mitigating the unknown future of reimbursement, soft volume and development of new care models.
  • Co-management arrangements also will increase.

• The lackluster economy and high unemployment rate will hold down growth but not costs.
  • More people will opt for low premium, high deductible health plans, and both employed and unemployed will defer treatment whenever possible.
  • While most Medicaid payments are flat (or less), Medicare is up less than 2 percent, and many health plans are limiting increases to less than 5 percent. Medical groups and hospitals are coping with wage rates rising 3 percent or more, benefit costs going up 8 to 10 percent, and utility, supplies, and drug costs increasing at least 10 percent.

• Care model changes will accelerate while IT to support the new models consumes attention and capital. 
  • Development of medical homes and bundled payments will increase, and clinical integration will be pursued with or without accountable care organizations.
  • Hospitals will begin to consolidate case management, hospitalists, and intensivists into a centralized, coordinated function.
  • Case management services will be embedded in medical groups and extended to post-acute care. 
  • IT focus will be on meaningful use standards and ICD-10 conversion, with development of HIEs, ambulatory EMR, CPOE, enterprise data warehouses, and results reporting.

• Capital remains king.
  • Access to capital will continue to get tougher for nonprofits while for-profits will see their access increase.
  • Non-profits will boost fundraising efforts while lack of access forces independents to weigh their ability to go it alone.
  • Private equity and public companies will leverage their access to capital to expand their reach into healthcare. 
  • Health plans, with their huge cash reserves, also will invest in managed care capabilities and acquire physician provider groups. 

• The stronger get stronger while the weak merge…or else.
  • Struggling facilities and medical groups will continue to see markets consolidate as volume concentrates to the leaders.
  • With healthcare reform, as many as 1 in every 20 acute-care hospitals could close by 2020.
  • Also by 2020, most states will have a handful of large systems, with very few true independent hospitals without some type of alliance.

• C-suites will see higher turnover.
  • With all of the change due to healthcare reform, delivery models, inadequate payment, labor strife, and declining inpatient volume, new leaders will emerge.
  • C-suites will restructure and reduce management ranks.

About The Camden Group

With offices in Los Angeles, Chicago, New York, and Boston, The Camden Group is one of the nation’s leading healthcare business advisory firms. The firm provides a broad array of healthcare consulting services in areas ranging from strategic and business planning and financial advisory and compliance, to hospital operations improvement, hospital/physician alignment, clinical integration, bundled payments, and developing accountable care organizations.  Since its founding in 1970, The Camden Group has advised more than 1,000 hospitals, medical groups, outpatient facilities, and other healthcare organizations nationwide. For more information, visit us online at www.TheCamdenGroup.com.

Contact:

Sarita Choy, Marketing/Communications Director

The Camden Group

310.320.3990

schoy@thecamdengroup.com

www.thecamdengroup.com

Through our strategic alliance with Labor Management Institute (“LMI”), we are co-sponsoring LMI’s 2010 International Conference on Workforce Management. The theme of this year’s conference is “Creative Strategies for Maximizing Your Resources.” Several members of our team will be speaking at this event, including Frank Flosman, MBA, Bonnie Barndt-Maglio, PhD, RN, Patricia Hines PhD, RN, and Steve Valentine, MPA.  The conference will be held June 9-10, 2010 at the Green Valley Ranch Resort & Spa in Las Vegas, Nevada. For more information, please download the brochure or visit www.lminstitute.com. We hope to see you there!

By Frank G. Flosman, MBA

 Many healthcare providers are discovering that while they were able to weather the rough economic climate of 2009, 2010 has brought additional financial pressures.  These pressures are likely to continue unabated given public and private outcries for healthcare cost containment. 

In order to meet the challenges of a permanently changed healthcare environment, provider organizations must improve operational efficiencies and structures to address both near-term financial management and long-term service and quality requirements.  Here are the top ten ways to achieve sustained operational improvements in a challenging healthcare environment.

1.  Strategically focus on high-return improvements first.  Identify those cost reduction and efficiency opportunities that are likely to yield the most significant results and then pursue these initiatives in a manner that supports service, quality, and customer satisfaction. 

2.  Balance short-term needs and long-term goals.  Achieving cost improvements simply through across-the-board reductions may limit an organization’s ability to adapt to future service requirements, as well as miss an opportunity to streamline structures and processes.  Cost improvements should be based on achieving efficiencies through aligning processes, service integration, structures, and resource utilization with best practices and the organization’s culture and mission.

3.  Improve organizational knowledge and capabilities to ensure sustainability of operational improvements.  Initial and ongoing communication, education, and training should be integral to any improvement initiative.  A communication plan should be developed at project inception; improvement rationale and objectives should be disseminated to all stakeholders; methods and metrics used to assess and monitor performance should be transparent; and orientation and ongoing training related to improved processes, management metrics and tools, and redesigned roles should be acculturated.

 4.   Use metrics to identify the overall likelihood and scale of operational improvements, followed by the use of best practice knowledge and experience to determine how to achieve required performance levels.  Tools, such as benchmarks, are essential for addressing and achieving operational improvements.  However, achievable performance goals and the specific opportunities related to these targets can only be determined following a comparison of current processes and structures against best practices.  This will result in achieving improvements that meet and exceed the organization’s needs (i.e. “push the envelope”) while considering the facility’s unique operating environment (i.e., improvement should not compromise long-term service requirements).

5.  Draw from multiple best practices and improvement techniques to develop an operational improvement approach that meets specific organizational needs.  Improvement initiatives should apply a variety of best practice methodologies, tools, and philosophies in a manner that considers, respects, and utilizes an organization’s unique operating environment.  This includes an organization’s specific culture, mission, organizational memory, resource availability, competitive landscape, current practices, and stakeholder expectations.  Relying on a single methodology or tool may not allow for the flexibility needed to adapt to the ever-changing healthcare provider landscape.

6.  Develop and institute accountability structures and practices.  Many organizations can identify both the need for improvement and at least the rough scale of likely opportunities.  However, very few organizations have the capabilities and tools to realize and sustain significant operational gains.  Management tools should be implemented, performance metrics established, and accountability structures and expectations should be set.  Most importantly, all these processes and structures should be fully and consistently utilized and fully embraced by leadership.

7.  Gain efficiencies from aligning resources and processes across the care continuum.  Increasingly, hospitals will find that they have limited ability to achieve significant efficiencies by focusing improvement efforts solely on internal processes.  This situation will be exacerbated in the future by likely requirements to better integrate service components across the care continuum. Including clinical integration components in any operational improvement initiative is one of the best ways to address near-term cost and efficiency improvement needs while preparing for probable healthcare payment methodology changes.

8.  Pursue new relationships with referral sources and related service providers that will facilitate successful improvement efforts.  A hospital’s ability to achieve significant operational improvements without addressing issues of stakeholder participation and behavior may be limited, or, more likely, very difficult.  This point is especially important given that the need to improve integration of clinical services may well transition from a major driver of efficiencies and effective utilization of scarce resources to a financial and perhaps even regulatory requirement.  New relationships with referral sources and related service providers will need to be developed and nurtured.

9.  Own the information, process, and outcomes.  Whether or not external assistance for either operational assessments and/or improvement implementations is utilized, hospital management must take full credit and responsibility for both the initiative and its outcomes.  Such accountability will convey the gravity of an organization’s need to improve, as well as give legitimacy to the need for all management staff to take charge and be held to performance standards and outcomes.

10.  Don’t wait.  Delaying operational improvement initiatives will only exacerbate current financial challenges and put an organization further behind the curve in preparing for whatever changes may come.  Hospitals and healthcare systems need to strive to improve operational efficiencies and structures now to address both financial management and service and quality requirements.

For more information on how to improve your hospital’s operations, please contact Frank Flosman at 312.775.1714 or fflosman@thecamdengroup.com.

Firms’ integrated approach to help hospitals and other healthcare providers improve service delivery and operating performance

Los Angeles, California, and Bloomington, Minnesota, February 18, 2010— The Camden Group and Labor Management Institute (LMI) announced that they have formed a strategic alliance in order to better assist hospitals and other healthcare organizations in meeting the growing demand to improve quality of care while optimally managing costs and resources. 

“We are thrilled with the opportunity to collaborate with LMI and their president, Chrys-Marie Suby,” said Steve Valentine, president of The Camden Group.  “LMI is a highly respected advisory firm and a power house in the field of staffing, scheduling, and other workforce management issues.  By partnering with our multidisciplinary team of hospital operations experts, together we can provide a comprehensive approach to operations performance improvement for our clients.”

Both firms are national healthcare business advisory firms.  Additionally LMI conducts and publishes the Labor Management Institute’s Perspectives On Staffing & Scheduling (PSS™) Annual Survey of Hours Report©, now in its 20th year, to track and benchmark hours of care for direct, indirect, and total worked hours and caregiver to patient ratios for RNs, LPNs, and nursing assistants for 60 different unit types and 7 service lines at teaching, community, and rural hospitals.  The survey also tracks staffing trends and practices.  It was the first national benchmark for nursing and is the most comprehensive reference for caregiver ratios in the United States.  Over 350 hospitals participated in the survey in 2009. The PSS™ Annual Survey of Hours Report© was both cited and quoted in the 2004 Institute of Medicine Report, “Keeping Patients Safe; Transforming the Work Environment of Nurses.”

“The Camden Group has an excellent reputation for delivering sustained operating improvements in a conscientious and responsive manner – they are a respected industry leader,” said Chrys-Marie Suby.  “We share the same commitment to providing the highest quality consulting services to our clients, and we look forward to working together.”

This latest news follows the recent announcement by The Camden Group that it has added a new senior vice president, James R. Smith, MBA, FACHE, to head the firm’s advisory services in clinical integration and the development of accountable care organizations.  Smith is based out of The Camden Group’s new office in the New York area. 

The Camden Group provides a vast array of consulting services on areas ranging from hospital operations improvement, strategic, financial and business planning, and physician group advisory services. Since its founding in 1970, The Camden Group has advised more than 1,000 hospitals, medical groups, outpatient facilities, and other healthcare organizations nationwide. For more information, please visit http://www.thecamdengroup.com/index.php.

The Labor Management Institute provides research, education, and consulting services specializing in the area of clinical operations, scheduling and staffing systems, productivity management, and implementing innovative practical strategies that balance the workforce and workplace.  Since its founding in 1981, with Eunice Lawrenz (as Lawrenz Consulting), the Labor Management Institute has provided education and consulting services to more than 2,500 healthcare organizations both nationally and internationally. LMI also publishes the nationally recognized Perspectives On Staffing & Scheduling (PSS™) Newsletter,© now in its 29th year.  For more information, please visit http://www.lminstitute.com.

Contact:

Sarita Choy, Marketing/Communications Coordinator

The Camden Group

310.320.3990

schoy@thecamdengroup.com

www.thecamdengroup.com

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Come visit us at our booth at the ACNL conference on February 8, 2010.  Two of our vice presidents – Patricia Hines, Ph.D., RN and Bonnie Barndt-Maglio, Ph.D., RN will be available to discuss important issues that nurse managers face, such as nursing and staffing management, case management, and patient throughput.  They will be holding a raffle – enter your business card for a chance to win an Amazon Kindle!

For more information on the conference, check out ACNL’s website.