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The top ten things CEOs got right during the pandemic

The top ten things CEOs got right during the pandemic
Rachel Tirabassi

By HFN Staff for Healthcare Finance News

All health systems and hospitals have struggled during the pandemic, in terms of both caring for patients who have COVID-19 and in staying above water financially.

It’s closing in on a year since the pandemic ramped up in the United States. By mid-March 2020, all 50 states and four U.S. territories had Centers for Disease Control and Prevention.

CEOs, CFOs and other executives heading the financial ship had to become more agile overnight. They shared many of the same best practices.

Healthcare Finance News spoke with three leading experts in healthcare advisory positions: Paul Keckley, managing editor of The Keckley Report, Christopher Kerns, managing director and vice president of executive insights for The Advisory BoardOptum and James Blake, managing director of Kaufman Hall.

Here are their answers to the question of what executives got right, financially and clinically, to survive the pandemic.

  • They adjusted their budget timing from static forecasting to rolling forecasting.

CEOs and CFOs moved away from a yearly budget while still planning for the longer view through worst and best case scenarios. Some CFOs adjusted revenue scenarios daily, said Keckley, who meets with executives and their boards on a weekly basis. Those who were able to execute the best models had Excel files outlining scenarios A, B or C, and so were able to adjust quickly, depending on the amount of community spread and the kind of traffic the emergency room was seeing. One board had four different scenarios around revenue recovery, he said.

The question of how to get things right, “comes up in every meeting I’m in,” Keckley said.

Health systems were getting real-time information and adjusting on a daily, weekly, monthly basis, Blacke said. “Rolling forecasting methodologies were extremely helpful,” he said, as the coronavirus, “fits within no budgets, no financial plan, no typical financial plans of cycles.”

  • They made smart labor cost reduction decisions.

Immediately, executives went looking for cost reductions such as through supply chain contracts for more aggressive procurement, Keckley said. Of course, this included labor, which makes up about 60% of an organization’s cost.

CEOs cross-trained many staff positions. When it came time to reduce labor costs, they were able to move staff, rather than execute across the board layoffs or furloughs.

Furloughs helped hospitals to keep trained staff, while keeping a targeted list of employee groups to bring back when ready. This was a fairly routine business practice, Keckley said. Some nurses were moved into home care, and some furloughed nurses joined a traveling nurse company to get additional pay.

“Nurses are prone to stay at a place where they think they have maximum autonomy, where they are treated with dignity and respect, but will move from hospital to hospital for a small improvement in those areas,” Keckley said.

Which brings up the number three thing executives did right. Those who succeeded at keeping staff and keeping up morale during a difficult time, even if layoffs were necessary, kept people informed.

  • They kept their employees informed of staffing decisions.

“They’ve done a pretty good job keeping their workforces aware, not necessarily happy,” Keckley said. “There’s been a ramped up effort to address workforce anxiety.  They made a concerted effort to keep them informed.”

This is particularly important in management’s relationship with its physicians and nurses. That good relationship had to start pre-pandemic. Some doctors have told Keckley they are fed misinformation.

“Give the doctor data: tools not rules,” he said. “They’ll make decisions that are understandable, not necessarily agreeable.”

Physicians are still dependent upon billing for fee-for-service and have seen their income cut. Keeping them happy through hard times can help stop poaching from private equity firms that want to hire them away.

  • They set up coordinated command centers or a communications hub.

Setting up command centers worked extremely well at making resource-sharing more efficient, Blake said. It was easier to move equipment, materials and staff from location to location, as needed. This also allowed health systems to be more reactive to changing circumstances, whether on the front lines or on the supply chain side.

“Our industry is used to sharing information, so they naturally came together, whether it was various children’s hospitals or other types of groupings,” Blake said. “Each organization routed calls between these various command centers to share practices — understanding, for example, that if you put someone on a ventilator in a certain fashion you could actually reduce someone’s chances of recovering versus another way. There have been a lot of great clinical practices shared.”

These decision-making centers enabled a more seamless shifting of resources across sites of care, according to Kerns. Strategies such as group staffing, information sharing and personal protection equipment distribution based on need helped them to avoid significant gaps in care, he said.

This sharing of resources, including staff, led to an atmosphere of cooperation.

  • They fostered an atmosphere of cooperation.

Executives put aside competition and worked towards one common goal – to end COVID-19, Kerns said. They got buy-in from staff, including nurses, before implementing a change.

The most successful CEOs were able to function as one system.

“This is something we’ve talked about for years in healthcare, which is the need to be more than the sum of their parts,” Kerns said, “for health systems to work more collectively, share resources more effectively and essentially get a greater benefit for being part of a large organization, like a multi-hospital system.”

  • They balanced finances and the greater community good and public health.

In addition to working more efficiently within their own system, separate organizations came together with their market rivals for the good of their communities.

Kerns said, “We saw an unprecedented level of cooperation among healthcare execs across the spectrum, many of whom are bitter rivals within their market – but when it came to sharing resources, making sure that no one provider was overwhelmed. We saw a remarkable level of cooperation especially among hospitals.”

  • They jumped on IT to help implement new strategies provided by regulatory flexibilities during the public health emergency.

The goal, said Blake, was and is to provide top-notch care and preserve both patients and the brand reputation of the organization. Some employed the use of telehealth, seeing patients virtually and benefitting from the relaxed reimbursement requirements enacted during the PHE.

Others achieved efficiency in their communications by utilizing automated solutions and other high-tech levers.

  • They looked past the pandemic.

Many of the changes implemented during the pandemic may carry forward as healthcare leaders look to what the industry will look like when the pandemic has passed.

“Many of the leading systems, they’re already saying, ‘What does this mean [post-COVID-19] for our entity?'” Blake said. “And they’re already starting to act on that. They had so many sacred cows. Many are already thinking about what it means for their future – whether that means they’re going to consolidate, or shift certain things. At a high level, they’re stepping back and thinking back at what is their true global strategy, not just financially, but also looking at the transformative portfolio.”

  • They continued to focus on the social determinants of health.

The pandemic elevated the social determinants of health to an executive level issue, so it is expected to remain a top priority moving forward.

“This is something that organizations have been trying to address, but by 2021 just about every organization we talked to has made reducing health outcomes disparities a strategic priority,” Kerns said. “And I think it’s going to stay there. I think it’s going to be a significant part of organizational missions going forward.”

  • They got involved in vaccine development.

Dartmouth-Hitchcock in New Hampshire researched COVID-19 vaccines and treatments and put everything online for participation.

“When you think about ‘What did CEOs get right?’ it would be really remiss not to talk about the vaccine development and the absolutely astounding speed with which we were able to see this developed,” Kerns said.

Specifically, the move towards decentralized clinical trials was huge in getting a vaccine developed so quickly. Researchers integrated technology into the process to allow for remote monitoring and data collection without the need for travel. This shift is one that Kerns expects to be permanent.

“Historically speaking, just being able to get enough people in the clinical trial was a challenge,” he said. “But now they’ve been able to use crowdsourcing technology to the point where not only can we get adequate numbers of people into clinical trials, we can do so at a speed that would have been unthinkable a year ago.”

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