Wednesday, August 4, 2010

As we predicted

The Wall Street Journal recently ran a story entitled, “Americans Cut Back on Visits to Doctor”. This story reflects our belief that health care usage in a weak economy would decline, particularly in acute care settings.

Instead, people are seeking alternative and complementary medicines and self-medication/treatments to address some of their medical conditions, and are certainly re-evaluating the need and timing for elective procedures. Understandably, we have seen a major shift occur, and I don’t believe care access patterns will EVER return to what they were before. (Please do not hold your breath hoping that “the good old days” will return, and do not keep looking for “another flu season”!)

This article clearly supports our position and thinking, and examines the eventual need for insurers to reduce their premiums to continue to capture the business. What does this mean for the CHRISTUS Health ministry?

1. We cannot rely on increases in volumes and increases in reimbursements to create better revenue streams for us. We have been saying for several years that revenue increases will only come from volumes created by organically-growing communities in markets where we are stealing market share, or where we can add new profitable service lines that the community values. Volume increases will not occur from our “same-store book of business.”

2. If people are going to doctors less, then less hospital admissions will be generated. Our CFO and I were on a call recently with the health care bond rating team from Standard & Poor’s, who we began bond rating sessions with in 1999. Their data again shows that inpatient volumes are down 7 percent across the U.S., and that outpatient volumes are starting to show declines as well.

3. With the reduction in revenue that physicians are seeing with their declining office visits, we can expect more doctors to approach us about an employment model. We must continue to tie these relationships to productivity and patient satisfaction structures that are justifiable and sustainable for the long term. We also need to continue to stress the need to partner with physicians in numerous other ways (like those identified trough our Physician Integrations task force) and come together to try and create win-win situations around high quality, low cost, and evidenced-based medical protocols and treatment plans.

4. We need to revitalize our focus on alternative/complementary medical services, which people will continue to seek once they discover and find them successful. Two of our Senior Vice Presidents are in charge of this activity, including the further identification of champion practitioners within our system. Fortunately, a good program has recently opened as part of the Sports Medicine and Wellness Center at CHRISTUS St. Vincent in Santa Fe, which can be used as a best practice to move forward in collaboration perhaps with our retail spa services or be created independently in our outpatient clinics.

5. We will need to continue to support other avenues to add additional funding to our revenues, which could include:
• The CHRISTUS Stehlin Foundation for Cancer Research
• Marketing some of our potential and already successful “adjacencies,” including TLRA, Revenue Cycle, Retail Services (including medical spas), convenient clinics, weekend and evening outpatient services on our acute care campuses, growth of our profitable non-acute services, etc.
• Garnering a clear understanding of how our international growth, which is less regulated, may provide more support for our U.S. ministries.

6. It is abundantly clear that the 5 strategic directions emanating from our intense Futures Task Force II work, driven by the overriding theme of having to become a high quality and low cost provider, are “right on” and position us well to respond to the changes and requirements brought about by health care reform.

It is important that we keep all of this information in mind as we continue to refine our system’s strategies in our acute, non-acute, and international divisions around our present and future thinking. Fortunately, the time we spend in future planning seems to be more and more valuable as we continue our Journey to Excellence.

It is reassuring to me, and I am hopeful to all of you, that we have much in place that, under Ernie Sadau’s future leadership, can be refined, intensified and accelerated to continue not only on our Journey to Excellence, but also to continue to strive to reach a goal that I put forth in my first speech in our first system leadership retreat in Houston in June of 1999: “To become one of the most excellent and most recognized health systems in the world.” Because of all of the efforts of the CHRISTUS family over the last 11 years, we are well on the way. The best is yet to come!

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