Posts Tagged ‘economy’

Going “Rogue” – An Open Letter to Healthcare CEOs

October 17th, 2011

For the past three years, I have had a chance to dig heavily into the future, and I’m pretty convinced that the old saying, “Necessity is the mother of invention,” has never been more true than in today’s healthcare environment.  What was a given before in healthcare management may no longer be so in the future, and since most hospitals only Chief Innovation Officer is the President him or herself, their tasks of visualizing, understanding, deciding and directing the future of the organization will be shifting even more heavily from quantitative deciding-and-directing to the more qualitative visualizing-and-understanding side of this leadership equation.

Although I understand the reluctance of most CEO’s to be on the bleeding edge of creativity, my experiences at my former positions can significantly reduce or mitigate the majority of risk from any decision regarding innovation.

Our new competitive environment has an insatiable appetite for information, access and connectivity and it’s a well known fact that a periodic injection of chaos fosters creativity and forces your co-workers to leverage technology.   Because most organizations already have an environment that is built on trust and collaboration, injecting a little creativity can put their CEOs in more of a position to be the orchestrator and the inspirer.

That Used to be Us That Used to be Us is the new book by Thomas Friedman and Michael Mandelbaum in which they analyze four specific challenges Americans face as a nation—globalization, the revolution in information technology, the nation’s chronic deficits, and our pattern of excessive energy consumption—and spell out what they believe needs to be done to sustain the American dream, and achieve true supremacy based on innovation and excellence.

As an innovator and futurist,  several sections of this book captured my imagination and brought closure to a myriad of beliefs that I have instinctively embraced over the past few decades.  When my responsibilities revolved around the CEO position, I always saw my job as being a contributor to an environment where creative decisions were embraced allowed to happen and then those innovators were rewarded and inspired to keep going.

As the co-founder of a Research Institute, one issue that continually resonates with me is that  “We don’t have enough ‘rogue’ CEO’s in healthcare administration to take risks so that the rest can benefit from both their successes and knowledge.”

Well, fortunately, I’m your guy.

For the last several years I have been out there implementing unusual things, and many of these disruptive ideas are coming to pass in a big way.  I was the first hospital CEO to blog, starting in 2005 (HealingHospitals.com), was an early Planetree board member, created the first breast cancer research center dedicated to the Department of Defense, and filled my hospital with Integrative Medicine, hotel amenities, and music.

Below, I’ve listed thirteen new examples of areas of innovation, in which we’ve been working for the past three years, as well as numerous ways to pay for these initiatives.

 Thirteen Examples of Disruptive Technologies and Practices That Hospitals Need to Understand 

  1. Robotic algorithmic software that improves emergency room flow by 37 to 50 percent.
  2. Financial transaction software that reduces electronic transfer fees exponentially (25% of health care income is from electronic transfers.)
  3. Utilization of nurses and actuaries as patient advocates to significantly reduce your employee health costs.
  4. Preventative medicine reimbursements that can double a physician’s income and add bottom line profits to hospitals.
  5. Treble growth potential of your organization through adding Integrative Medicine
  6. Diabetic retinopathy telemedicine for Family and Internal Medicine docs.
  7. Proteomic and genomic testing creating new “hospital income.”
  8. Peritoneal lavage that extends Stage 4 cancer patients from three months to five years or more.
  9. Bone scaffolding that supports bone growth and virtually eliminates bone infection.
  10. Special bandages that protect and stem cell cocktail sprays that heal burn wounds
  11.  Access to a cancer consortium that allows small and medium hospitals to become Certified Cancer Centers
  12. Hospitals paid “not to play” during an energy crisis as a back-up to the power grid.
  13. Green hazardous waste disposal costing 25% less than traditional methods

If you’d like to learn more about any adopting any of the concepts above, or receive a leadership presentation that will enable your staff to see the opportunities (rather than just the threats) in our current, uncertain environment, here’s where to find me.

Why Are Hospitals The Way They Are? from Nick Jacobs, FACHE on Vimeo.

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Posted in Healthcare, Hospital Administration, Integrative Health, Leadership

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Barcelona, VAT and Ambiance

August 18th, 2011

Last weekend, I traveled to Barcelona. How does one afford to spend a weekend in Barcelona in this economy with the dollar at $1.40 to one Euro, one might ask?  Points, my friends, points. When you travel enough, it’s possible to build up quite a few of these delightfully-useful but quickly-diminishing-in-value “perks,” and that’s how I got there.

Because it’s “Vacation time in Europe,” numerous hotels, restaurants, and tourist attractions offer nice packages for a reasonable number of points, and because I’d never been to Barcelona or anywhere in Spain for that matter, it seemed like a good plan. Albeit brief, my 4 day journey into yet another culture was almost worth the pain of traveling. Of course, if you remember my Serbia, Nigeria, Bosnia, Netherlands and Italy blog posts, you know that I’m all about “experiences.”

Barcelona - juice seller - Flickr Photo

Barcelona: juice seller at the Mercat de la Bouqueria - Flickr photo credit: Halvorson Photo

The longer I live, the more interested I am in how other people live. Many years ago, probably 20 or so, we had an exchange student, Monica, from Barcelona who used to stand in my family room, look out the window into the rolling fields and proclaim, “Nick, Nick, I am sooo bored.”  Truthfully, I was, too.

So, why Barcelona, VAT and the “A” word? I fell in love with the city. I loved the ambiance, the food, the wines, the architecture, and the people. Maybe it was the fact that there are two million souls living there, and I never felt uneasy even once. Unlike my last trip to Chicago, where I couldn’t sleep all night because of the continuing chorus of sirens from emergency vehicles, Barcelona’s street in front of our hotel erupted in the wail of those distinctive, European sirens only
about four times, from Friday until the following Monday.

Interior of La Sagrada Familia basilicaSome of the little things that captured my attention included the walk/don’t walk sign on the streets that actually allowed you enough time to cross at your leisure without being hit by an oncoming car. The people and cab drivers were polite and, most importantly, there was a feeling of helpfulness and respect in the shops, restaurants and architectural wonders.

Of course, by Sunday evening, we had visited nearly every architectural work of Antoni Gaudí, and toured and listened to a great concert at the inspiring Palau Música Catalana. Barcelona is today one of the world’s leading tourist, economic and cultural and sports centres, and this all contributes to its status as one of the world’s leading cities.

But what about the rest of the title of this blog post? Every time we purchased something material there, the VAT tax was applied, and when I asked someone to explain it, the answer was simple, “It’s how we pay for healthcare.” Consequently, when we walked the streets over that entire weekend, we saw a total of five beggars, and three of them had a Starbucks Cup to catch the falling Euros.

The other things that we saw everywhere were dumpster-style recycling binsBarcelona: color-coded recyclying bins. And not just any bins, either. Very fancy, clean, able-to-be-picked-up-mechanically bins, that were specifically color coded for every imaginable kind of recyclables. Not rocket science, but a comment on community pride, sustainability or climate change, perhaps.

So, we’ve taken care of the creation of a pleasant ambiance on numerous levels with extraordinary architecture, beautiful tree-lined streets, recycling, healthcare, low crime and compassion for fellow human beings. We didn’t see many Mercedes, but we also didn’t see much evidence of poverty, either. The beaches in town were public, and not controlled by exclusive beachfront hotels. Barcelona’s public transportation was a pleasure — clean, comfortable and efficient, with a train to Paris that delivers you there in about three hours…and the Tapas, wine and customer service were all simply amazing.

Nationally, Spain’s unemployment rate hit 21.3%, and they are listed as one of the PIIGS:  Portugal, Ireland, Italy, Greece and Spain…i.e., economically-unsound EU countries. In spite of these huge challenges,  Barcelona was a great city, a great experience, and a great setting with world class arts. So, should we charter an Airbus 380, load up our U.S. Congress, and fly them to Barcelona?

Nah, it wouldn’t help.

Hmm. Maybe we should fly them to Somalia?

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Posted in Public Health, Travel

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It’s Been (Quite) a Year…

December 19th, 2009

Last year at this time, as word of the global economic meltdown was beginning to take hold, we saw the beginning of a decline in all aspects of purchasing, including the  optional surgeries and tests in our hospitals.  At the same time, as a member of several volunteer boards, we began to see declines in ticket sales that went as high as 20%.  Later, we met with restaurateurs who indicated that their business was down between 10 and 20%, an amount that proved to be terminal for numerous marginal companies.

obama_health_costs

As the year proceeded, we saw  hospitals make extensive cutbacks in employee  education, travel, and marketing.  This trend became the norm in the industry.  The healthcare-related industries that seemed to hurt the most were those involved in construction and new equipment acquisition.  One type of firm that did well was financial consulting groups, like SunStone Consulting, LLC , organizations that specialized in finding money that hospitals had already earned, but had either not been staffed deeply enough to pursue or that did not know the processes necessary to generate these funds.

For those of us in administrative consulting, the year has been interesting.  Decision makers stepped back a little and waited to see where Obamacare was heading, to collect more cash in a society where “cash was definitely king,” and to cut back on new initiatives until things had settled down economically.  These leaders watched the markets, looked at investment activities, counted revenue versus expense results, and generally became more conservative in their leadership approaches.

What’s on the horizon:  There is an old saying that “He who looks into a crystal ball to predict the future will get crystal in his eye,” that is not far from truth.  Are we completely out of the woods?  Not by a long shot.  Will there be additional taxes, additional expenditures that are not budgeted nationally?  Yes, most assuredly, there will be, but are we certainly seeing more positive signs in virtually every economic indicator that would predict at least a somewhat more optimistic overall outlook.

Wall Street Journal: Pointing to renewed signs that the global slump is bottoming out, the International Monetary Fund on Wednesday upgraded its outlook for 2010 while slightly trimming this year’s forecast.

The overleveraged global financial system continues to cast a shadow over the economic outlook, however, and the fund urged policymakers not to become complacent about recent market improvements.

“Financial conditions have improved, as unprecedented policy intervention has reduced the risk of systemic collapse and expectations of economic recovery have risen,” the IMF said in its updating its outlook for the world economy and financial system. “Nonetheless, vulnerabilities remain and complacency…

100_on-iceSo, if we embrace those little rays of hope as a means of restarting the economic engines, if we visualize a better future for all of us, if we focus on the positive, at the very least we most likely will find a better parking space at the Mall!

Happy Holidays and here’s knowing that 2010 will be a better year for everyone.  (It wouldn’t take much!)

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Posted in Current Affairs, Healthcare, Hospitals, marketing

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Nine Trillion Dollars in the Hole?

August 22nd, 2009

Let me be the first to admit that I was and am all about change. Change has been the only consistent thing in my life.  Today, however, when the deficit projection was revealed to be nine trillion dollars over the next ten years, my non-economist mind began to wonder where this is all going?

My son-in-law is coming home in the next several days from a one year deployment that saw him in harms way in Iraq for the last eight months, and now we all sit with our fingers crossed that we will not be facing a similar deployment not too many months from now to Afghanistan.

How does one maintain two wars, keep soldiers stationed post-World War II in Italy, Germany, and Turkey, to name a few, and in South Korea plus continuing to remain in Iraq, and now push more and more into Afghanistan without bankrupting this country?  Is it possible that very very smart people are not capable of figuring out that in a down economy, the finances will continue to go south until we are, like the USSR in the Cold War, going broke?

When do we begin to see that the previous several administrations lead us into a mindset of borrowing against our future to the extent that we may not have a future, and when will we say, “Okay, enough, let’s stop feeding trillions into wars, and start trying to figure out the rest of this economic equation?”  It clearly is no longer a war on terror, but what is it?  If it is an economic war intended to create jobs a.k.a., the argument for or against the F-22 cuts, can’t we find a better way?

health_debate_specterThe people who seem the most upset about the health care debate are clearly the people who have healthcare, and the people who are least likely to speak out are the young women and children who have no coverage.  Not only will they not speak out, they also don’t, for the most part, vote.  If anyone believes that we are not in some way paying for the 46 or 47 million uninsured now, they are clearly delusional.  Ask a hospital CEO how much the facility charges for an aspirin or a Q-tip.  It’s not because these items cost so much more in a hospital setting, it’s because there is not enough money to go around when patient after patient presents at their doors without healthcare coverage.

We have acquiesced to AIG, to the very large banking institutions, to the automobile manufactures, and to numerous major financial houses.  We have placed billions of our tax dollars into their hands and have watched as their CEO’s, like that of AIG, continue to make millions in salaries with millions more in bonuses.  We have continued to wage wars that were clearly called “Republican Wars” during the last administration, and have no name now.  And we are watching our Social Security and Medicare accounts dwindle more quickly than anyone could ever have imagined.

Far be it from me to take a political stand on such complex economic matters, but it does seem very certain that our futures are tied inextricably together and, unless we slow down our expenditures, find ways to be more fiacally responsible, and, take care of our fellow man, we seem to be heading down a very destructive path.  Alan Greenspan’s admission of missing the economic targets of not too many years ago rings in my ears as he said, “I underestimated the greed.”  Maybe we have all underestimated the greed for too long.

As a professional giver of advice, let me conclude by saying that we can make this work. We can pull back the reins, slow the spending, and still move the economy.  It’s no different than managing our own personal economics; live below your means, save, take care of the necessities, and realize that not all belts can wrap around a 44″ waist. But all of this takes some serious discipline, something that our leaders seem to have been missing for a very long time.  We can’t continue to talk our way out of trouble;  serious, positive action is the key.

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Posted in Healthcare, Public Policy

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The Marketing Enigma

February 15th, 2009

As the economy continues to present its myriad of challenges nationwide, hospital executives are embracing a variety of cost-cutting measures at a very high rate of implementation. Delays or discontinuation of capital projects, employee layoffs, and a variety of other broad-based measures are currently dominating the healthcare environment.

Departments without direct patient contact are usually perceived to be the easier layers to peel in these expense reduction activities. Areas such as marketing, community, and public relations often become prime targets as they are significantly scaled back or even disbanded.

Historically, hospitals have implemented fluctuating sequences from one extreme to another as they have decreased and increased marketing department sizes and budgets through the various economic cycles. Unmistakably, in challenging economic times, marketing is nearly always more important than ever. Without knowledge concerning the various services available, the patients will not be aware of the nuances of each and how they could impact their health and wellness.

Having said this, however, many hospital executives are not experts in this area, and consequently, they simply move in lockstep with those individuals who see these programs as non-patient expense centers that merely drain the organization of its valuable resources even further.

BusinessDictionary.com aptly describes marketing as the management process through which goods and services move from concept to customer. As a philosophy, it is based on thinking about the business in terms of the customer, or in healthcare, patient needs and their satisfaction. As a practice, it consists of the coordination of four elements:

  • identification, selection, and development of a product
  • determination of its cost
  • selection of a distribution channel to reach the patient, and…
  • development and implementation of a promotional strategy designed to reach these goals

In order to avoid erroneous decisions that could lead to disastrous business consequences for the organization, marketing evaluations might be performed by professional marketing assessment companies specializing in this arena. Some of these firms can provide this service in economically viable risk-reward agreements that do not further complicate the financial challenges being addressed. They specialize in the evaluation of services that detail which marketing functions need to be continued and which functions should be restructured, and/or outsourced. The goal of these marketing evaluation firms is to:

  • help preserve the existing positive effects created by marketing
  • build better marketing practices, and…
  • cut the unnecessary associated costs

In two decades of observing the yo-yo phenomena described above, we have worked with numerous individuals and firms along the way, but none have been more valuable than the firms that specialize specifically in this area of marketing department analysis.

Firms that provide this specific service can be found through the American Association of Healthcare Consultants, The American Marketing Association, and the Society for Professional Marketing Services.

In our work, however, we have found at least one company that has continuously provided the necessary analytic and evaluation components required to complete this sensitive task. Corathers Health Consulting is a unique organization because it utilizes luminaries and unique specialty consultants through a team approach for most of their highly customized projects. What we observed when we worked with Corathers was that their distinguished consultation supplied an unparalleled differentiating factor over the other consulting companies with whom we had previously worked, but they are one of many such firms.

Regardless of the organization chosen, the concept is the key, and that is that you owe it to yourself and to your organization to understand exactly what can or should be eliminated or outsourced before the cuts are irreversibly implemented. The future of your organization may lie directly under that hatchet, and once the decision has been made, reverse is a costly gear to find on a very bumpy road of lost business, missing publicity, and absent advertising. The answer lies in cutting wisely and appropriately as you attempt to keep patients informed and to grow your business.

Linking a patient-Centered Approach to Quality Improvement & HCAPS

Nick Jacobs, FACHE addresses the 2008 Healthcare CEO Summit, co-sponsored by the Picker Institute and Planetree. Chicago, IL USA – Fall, 2008

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Posted in Healthcare, Healthcare Marketing, Hospital Administration, Hospitals

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Something’s Gotta Give, Something’s Gotta Give, Something’s Gotta Give!

November 1st, 2008

My Facebook friend, Anne Zieger, editor of Fierce Health Finance, wrote a compelling piece the other day regarding the potential demise of hundreds of hospitals. Her prediction is based upon some very valid financial realities, and we are witnessing them locally as well as nationally. Not unlike the little banks in our area that seemed to have been insulated from Wall Street’s collapse, some of these national problems seem to be washing over some of the smaller hospitals with relatively minimal damage. Yes, many of us have seen as much as a 10% decrease in elective, outpatient procedures.

In fact, while visiting a really upscale mall for a photo session with my two year old granddaughter, Lucy, an employee engaged me in a conversation about the rotten economy. About five minutes into the conversation, she indicated that there are currently 150 stores in the chain for which she works, and that only five percent of them made budget last month. Portrait pictures must fall into the category of a luxury as their business is severely impacted by this economy. More directly, however, she indicated that she needed stitches removed the other day, and that, “she did it herself” rather than spend the $20 co-pay.

So, are we seeing decreases in important tests? Are we seeing patients avoiding emergency room visits? Are we seeing patients cutting their prescriptions in half? Yes, to all of these questions. Anne, however, seemed to be talking about the “big boys,” where their millions or billions in investments have recently tanked. If you are so big that your income from running the hospital is not a major source of protection, and your income from your investments is propping you up, then the problems begin to manifest themselves exponentially.

“Some hospitals are responding by digging into their investment income more deeply than usual, using it to finance capital projects, or even meet operational needs. Others are issuing bonds with the scary codicil that they’ll buy them back if finicky investors want to dump them,” states Zieger in her column.

She further goes on to explain that “both of these situations put a huge squeeze on hospitals’ long-term viability. One robs from their long-term assets to solve medium-term problems, while the other puts the hospitals at risk of being bled dry by investors who get spooked.”

Well, wouldn’t ya know? Yes, we are seeing a few challenges due to decreased electives, but not because we were living off of our investments. The other good news is that, because we froze our fixed pensions several years ago, we are seeing very little impact upon them from the huge drop in those investments as well. Unlike many of our larger peers, neither of these issues is similar. Between the drops in the market, the loss of pension funds, the decrease in electives, and the down-grading of their viability by the bond markets, their challenges look galactic in size compared to ours.

Sometimes smaller is just safer.

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Posted in Healthcare, Hospital, Hospital Administration, Hospital Blog, Hospitals, Integrative Health, Leadership

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