ViewPoints Blog

Hospitals and health systems are facing some pretty stiff competition these days. The emergence of convenient care providers and retailers offering more and more healthcare-related services has changed how hospitals view their markets. As a result, the ability of hospitals and systems to leverage next-level market analytics to their advantage can be the difference between being a market leader or just a member of the pack.

While the first questions (How am I performing? and Where are my opportunities?) in our 4-part series on integrated performance management focused on understanding performance levels and pinpointing areas of actionable opportunity, questions three and four (How do I improve? and Am I improving?) bring the discussion into a new phase.

It’s no secret that hospitals and health systems must ramp up efforts to improve performance given rising healthcare costs and an unstable political environment. For decades, hospitals and health systems have recognized the importance of managing costs and have routinely pursued unit-based cost reduction strategies with varying degrees of success. For the most part, these efforts have yielded some levels of success but there is more to do and the pressure to perform is significant. 

In our last post, we explored the first of four key questions in an integrated performance management approach, ‘How am I performing?’ As discussed, answering that question is critical to constructing a clear view of current performance and then creating meaningful goals which will lead to action and performance improvement initiatives.  

We recently hosted an HFMA webinar presentation and invited one of our clients, the CFO of OSF HealthCare, to discuss OSF’s approach for driving performance management. It was clear from the impressive results achieved at OSF ($160 million annualized savings!) that while making incremental progress may have been sufficient in the past, getting to that next level of meaningful and sustainable performance improvement is now critical for hospital and health system leadership teams.  

While pressures to reduce costs and improve quality aren’t new, the imperative has shifted from ‘making progress’ to ‘establishing meaningful and sustainable improvement.’ This is a tall order given the complexities of our industry and the challenges we face.

I’m heading to HFMA ANI 2017 in a few weeks, and I expect that during my conversations with hospital leaders I’ll hear that most of them are intent on increasing their overall market “footprint” and integration to adequately optimize new payment models, manage their patient populations, and improve the health of their communities.

At the outset of their benchmarking and performance improvement initiative, St. Joseph Hospital & Trauma Center in Nashua, New Hampshire had the topline goal of making their operations more efficient. They expected to make changes to reduce costs and improve patient care—and they did. But they also had an additional and unexpectedly pleasant result: Frontline managers felt more ownership of the performance improvement process, which boosted staff engagement and morale. And through the ripple effect, they created a data-driven culture.