- At the 2021 Not-for-Profit Health Care Investor Conference, health system executives and industry thought leaders described how hospitals are evolving to meet the needs of communities.
- An expanding focus on innovating to serve consumers was apparent before the COVID-19 pandemic but has accelerated since.
- There are many different ways for hospitals and health systems to support efforts to address the social determinants of health.
Amid the COVID-19 pandemic, hospitals and health systems continue to look for ways to transform their operations for the benefit of their communities.
That concept came up frequently during the 2021 Not-for-Profit Health Care Investor Conference, the theme of which was “Forging the Future.” The annual event, which took place virtually this year, was presented by Citi, the American Hospital Association (AHA) and HFMA.
In addition to waging a continuing battle against COVID-19, hospitals are “resuming the work that was interrupted by the pandemic — the transformation of our healthcare delivery and payment models,” said AHA President and CEO Rick Pollack. The goal is to “provide better care at lower costs, in a more accessible manner.”
Attended by an audience of healthcare investors, the conference included presentations by leaders of 18 health systems on their organizations’ financial and operational outlook and strategies. In addition, keynote sessions offered big-picture perspectives on industry trends.
Accelerating the forces of consumerism
Much of the strategic planning by organizations centers on becoming more consumer-oriented. Zeev Neuwirth, MD, a physician executive and author, expounded on that trend during a keynote discussion with HFMA President and CEO Joe Fifer, FHFMA, CPA.
Among the numerous healthcare innovators and disruptors with whom Neuwirth spoke for his book “Reframing Healthcare: A Roadmap for Creating Disruptive Change,” a common theme was the presence of “a marketing mindset,” he said.
“They're really borrowing the fundamental essence — the principles — of marketing and imbuing it into healthcare.
“They all had this customer obsession from the beginning. They all had shifted their thinking from the professional side to how does a user, how does a customer, how does a consumer think and feel, and how do I build something from that perspective?”
Such an approach is key to improving the health of communities because “if people aren't engaged in what you're trying to push on them, it's not going to work,” Neuwirth said. “Even if that thing is surgery, if you're not taking care of yourself before surgery and after surgery as a patient, the surgical outcomes aren't going to be as effective.”
Applying lessons from a leading hotel company
In striving to offer optimal service to consumers, healthcare can draw on examples from other industries that more traditionally have had such a mindset.
One such sector is the hospitality industry. Mark Vondrasek, chief commercial officer with Hyatt, spoke as part of a keynote session at the conference and said the hotel chain has used the pandemic as an impetus to rethink processes and policies.
In the early days of the pandemic, Hyatt reached out to guests and customers despite knowing few if any would be traveling. “We're a smaller company,” Vondrasek said. “We don't compete with scale. And when you're smaller, you've got to do things like listen better and be more connected in order to be successful.”
Among the changes implemented as a result of those talks were processes that enhanced the digital customer experience. “Our guests who were traveling said, ‘If I am going to be in a hotel, I want less contact. I want knock-and-go food service. I don't want to stand in line and talk to people about checking in,’” Vondrasek said. As with the healthcare industry’s continuing focus on ways to deploy telehealth, such processes are still being utilized at Hyatt even in areas of the country where the pandemic has waned.
But some customers prefer to interact with a person as long as it is safe to do so. “You better understand that one size does not fit all,” Vondrasek added. “And if you start to force people down a track of less human connection [and] that is uncomfortable for them, then you really miss an opportunity to deliver an experience on their terms.”
Part of being consumer-oriented is understanding the principle of customer segmentation and the need to build tailored solutions for different segments. Other industries long have understood that notion, and healthcare seems to be coming around, Neuwirth said.
Strategic segmentation can be seen in health systems that have launched health centers for seniors and for women, for example. “Trying to be everything for everyone, everywhere all the time is a very, very tough path to take,” Neuwirth said.
Looking upstream to improve community health
Many of the presenting health systems described approaches that are underway to improve the health of their communities by addressing social determinants and other factors that lead to health inequity.
Doug Jutte, MD, executive director of the Build Healthy Places Network, spoke about how hospitals and health systems can partner with nonhealthcare organizations to create healthier and more equitable communities. He highlighted the following approaches.
Data. Hospitals and health systems can share health data, provide analysis capacity and jointly conduct community health needs assessments with community organizations. “Even the analysis capacity is often pretty limited for local community health organizations, and healthcare systems often have some of that capacity.”
Political and community clout. Hospitals and health systems can engage the community in proposed zoning changes, for example. “Many of the barriers to community development actually arise from local issues that healthcare can help overcome.”
Grants. Providing community benefit dollars or “repayable grants” (i.e., 0% interest loans) can bolster communities. In Portland, Oregon, for example, five health systems and a health plan teamed up to provide over $21 million in grants that funded several hundred units of affordable housing.
Real estate. Underutilized land or facilities can be a major boost in community development. “Often the biggest expense for development is the land. And so if that can be obtained cheaply or leased in a long-term way, it allows a project to move forward perhaps more quickly, or to be able to serve a lower-income population.”
Loan guarantee/credit enhancement. Hospitals and health systems can provide reduced interest rates for community development efforts. “An institution with a large treasury reserve [or] endowment can commit a small part of that toward basically backstopping a community development loan, and this allows a lower interest rate to be available.”
Short-term loans. Bridge loans or evolving lines of credit can be important tools for fast-action initiatives. These instruments represent “a way of allowing organizations to rapidly borrow money, to buy something, to protect against gentrification quickly [if] they have the money [but] there’s just bureaucracy involved.”
Pooled investments. Combined investment can take the form of community development equity or loan funds. “This is an opportunity for large systems that are interested in making these types of investments to do it jointly with others. It really reduces the risk and spreads out any losses.”
Direct investments. These are low-interest loans directly to community development corporations, housing groups or others. “This is the riskiest [strategy], the one that takes the most expertise, and not all places have that.”
Hospitals and health systems that engage in such initiatives showcase efforts to reshape the industry by striving to be more than providers of healthcare. The role they increasingly envision for themselves is as stewards of community health.
“They understand the need to find fresh approaches to solving the challenges our industry was grappling with way before COVID emerged,” HFMA's Fifer said. “These organizations should be commended for their insight, their willingness to reimagine the role of hospitals in a changing healthcare landscape, their commitment to change leadership.”