What Are You Building?
The current financial and operational pressures exerted on the traditional healthcare players are immense. Hospital systems, provider groups, and patients are either providing or receiving care during a time of unprecedented financial headwinds. I will not dive into the causes of, or cures for the current financial conditions in the business of healthcare, but will address their impact on its stakeholders, and the culture and climate in the healthcare delivery business.
Industry print and public reporting since the pandemic and the onset of a non-zero interest rate environment suggest that some healthcare organizations are in the process or close to taking it down to the studs and re-inventing or retooling their model. Even worse, some may be at risk for acquisition, consolidation, or closure. Serial years of major financial losses for health systems already operating at razor thin margins means years of recovery. A consequence of this protracted recovery are limitations on Opex and Capex as organizations rationalize their necessary austerity. When you combine those elements with declining reimbursement rates, consumerism around pricing and its transparency (on all sides of the paradigm), cost of existing debt, and declining or stagnate population growth in many markets, one can easily see that the structure of the operation for many is approaching tear-down territory, or at least a major remodel.
One might argue that the current volatility and dynamics within our beloved industry is needed, in hopes that, in the words of Maren Morris in her song The Bones, “The house don’t fall when the bones are good.” In furtherance of her point, Maren repeats an axiom, “When the bones are good, the rest don’t matter,” suggesting that
a strong structure and foundation can withstand the greatest of storms or the deleterious effects of age and disrepair. But in the business of healthcare, the whittling away of facilities, equipment, amidst stagnate administrative and business processes has a major impact on our clinical and non-clinical caregivers, and of course our patients.
The cost to our human capital is noted by the historic levels of turnover, attrition, lowered levels of engagement, and workforce shortages since the pandemic. Patients are taking note and are increasingly frustrated by downstream effects from staffing shortages, turnover, and worn-down facilities. Patient experience champions know this to be true, and these realities beg the question, has the business climate forced organizations to make such deep cuts that the bones are no longer good, and the rest really matters?
Let’s say your organization recently faced a major reconstruction (aka reorganization), but not a complete teardown, do you as a leader have enough raw material left or access to new material needed for your rebuild project? Does your workforce have the resources, energy, and level of engagement needed to provide an exceptional experience to patients? Are your caregivers proud of the facility they come to each day and proud of their team? I also ask you leaders an important question, do you have the fire and energy to take on another rebuild or construction project?
Over the last 20+ years in healthcare I’ve thrived when building critical services that meet patient and community needs, strengthen organizational effectiveness, and deliver a measurable and impactful return from these investments and projects. THESE ARE NOT MUTUALLY EXCLUSIVE AIMS and ought to guide your vision. Building on your organization’s strengths and unleashing its potential by bringing the right people to the table at the right time create conditions for the best ideas/solution to succeed and for your business to win. Through a thoughtful strategic and management plan that is executable, measurable, sustainable, and a lot of hard work, your vision is within reach and I am here to help.
I enjoy building, not demolition. If you are like me the prospects of building (or rebuilding) your team, a service line, or product is what drew you to healthcare and continues to inspire you. There may be hard work ahead to get down to the studs and gain the clarity you need to define your new model and mission. Whether you
are in the process or tearing down or building, I would love to learn about your project and your vision. In the meantime, be well and stay safe.
Jordan Javier, MBA
Javier Healthcare
The Business of Healthcare Consulting
jordan@javierhealthcare.com