Recent health care reform has paved the way for the industry to move from a traditional fee-for-services model to a value-based services model. emphasis is shifting from the volume of patients and services toward investing payer funds into care that adds value and improves health outcomes. With these reforms has come closer attention to physician incentives, initiatives to make the system more transparent, and attempts to openly engage patients. this has changed the landscape of the hospital at all levels, which poses new challenges for the hospital c-suite.

1. New Challenges
Facing the Hospital C-Suite

2. 2
The information and concepts contained in this document are the proprietary property of Sodexo.
As such, they cannot be reproduced or utilized without permission.© 2015
Recent health care reform has paved the way for the industry to move from
a traditional fee-for-services model to a value-based services model.
Emphasis is shifting from the volume of patients and services toward
investing payer funds into care that adds value and improves health
outcomes. With these reforms has come closer attention to physician
incentives, initiatives to make the system more transparent, and attempts
to openly engage patients. This has changed the landscape of the hospital
at all levels, which poses new challenges for the hospital C-Suite.
New Responsibilities, C-Suite Positions
and Required Executive Backgrounds
With changes in health care demand and system context also
comes the need for additions to the senior executive table and
new C-Suite positions. While some of the new roles overlap
with traditional positions, others cover new aspects of hospital
care provision that did not previously exist. The challenge
faced by the C-Suite lies in deciding which of the many
evolving roles to add to the table and how to integrate
them alongside existing roles. At the same time, new and
existing executive teams as a whole must align their behavior
in a collaborative decision-making unit. To do this, hospitals
must transform traditional hierarchy into horizontal
leadership, which may be difficult for high-achieving individuals
who have previously been rewarded for exceptional leadership of
specialized business units. New capabilities and backgrounds
are required in the C-Suite to ensure not only expertise
in designated functional areas, but also the ability to work
interdependently. Physicians are finding themselves in leadership
positions, as are outside hires with no health care background.
Complexities of Building and
Ensuring a Continuum of Care
To ensure care continuity and support the move from an
historical emphasis on post-acute care to the new strategic
imperative of managing the health of a designated population
across a complex delivery system, the hospital C-Suite must
form affiliations with new partners. Unlikely allies, including
previous competitors, are coming together to support volume,
achieve economies of scale, ensure necessary infrastructure, and
manage the health of an entire patient population. Furthermore,
strategic alliances are being made with new partners, such
as health plans and vendors, whose core lines of business are far
outside the traditional realm of provider entities.
Conflicting Priorities: Patient Safety
and Financial Sustainability
The majority of hospital executives see patient safety as their
top priority. At the same time, an equal amount view failing to
maximize financial sustainability as their biggest threat. Yet
neither of these two areas is getting executives’ full attention and
time. In fact, C-Suite priorities such as financial sustainability,
quality care and maximized patient safety seem to compete
with each other, while also being key hindrances to the fourth
priority: minimizing overall hospital risk. A challenge lies in
relieving the “safety vs. finance” tension at the executive level.
Operational Challenges:
Cost and Labor Issues
Hospitals are facing financial pressure due to a combination of
declining revenue as a result of decreased patient volumes, as
well as rising costs, attributable in part to health care reform.
Initiatives to promote new medical and administrative
technologies are proving expensive to put in place,
especially for smaller hospitals that find it difficult to acquire
capital financing. At the same time, hospitals are facing a
significant labor shortage of qualified staff, particularly
primary care physicians and nurses. Increased competition for
staff has driven up labor costs.
Need for New and More
Robust Data Analytics
To monitor performance – both in financial and in care quality
terms – more data analytics are needed to inform C-Suite
decisions. Aside from traditional volume-based data, which is
still of major importance, hospital executives will also need
more and better information on patient outcomes and
experiences. The lack of consistent quality measures requested
by various payers and regulators is adding to the challenge
and contributing to the need to collect all possible indicators
of outcomes and care quality. Furthermore, given the shortage
in staff and the focus on the link between hospital staff and
patient outcomes, executives will need to gather data on
employees and their satisfaction and well-being.
Michael P. Norris, CEO
Healthcare North America

3. 3
The information and concepts contained in this document are the proprietary property of Sodexo.
As such, they cannot be reproduced or utilized without permission.© 2015
The Patient “Consumer”
Mindset and Elevating Patient
Experience to the C-Suite
With increased transparency and choice, the health care
system is increasingly resembling a retail environment,
with patients “shopping around” for elective surgery and both
the government and large private payers integrating patient
satisfaction scores into reimbursement. As a consequence,
executives must ensure that their site is a top performer on
those quality indicators publicly available, particularly patient
experience surveys. “Patient perks” in all areas of the patient
experience are also on the rise, as is the strategy of hospitals
engaging in unconventional services, such as community
classes, catering services, day care services and exercise classes,
which may not bring a profit but help promote a positive image
of the hospital. For the top level, the engagement in new lines of
business that are not part of the core presents a new challenge.
Regulatory Compliance
Hospital executives may struggle with compliance under the
recent health care reforms. Of particular importance is the
challenge of continuously keeping up with new waves of
regulations and guidelines, which usually have very tight
implementation time frames. Additionally, given the heightened
transparency and scrutiny, hospitals must continuously
improve in order to meet CMS and DHHS safety and
quality standards. Further issues concern ACO collaboration
and integration, especially anti-trust laws, kickback laws and
physician self-referral.
Integration and the Demise
of Standalone Hospitals
Standalone hospitals are disappearing due to rising costs,
decreased patient volumes, and a lack of economies of
scale compared to larger networks that are better equipped
to implement health care reform changes. Challenges in
integration – whether it be integration into bigger health
networks or mergers of smaller independent hospitals –
are numerous and demanding. Multispecialty group
formation may be necessary to ensure a care continuum, but
aligning different specialties can be difficult. Trying to integrate
the different business cultures of partnering hospitals into
a united culture can also be a barrier. In addition, to ensure
successful integration, hospitals must be aware of their ability to
allocate the resources (staff, time, money) necessary to carry out
the process.
Conclusion
In light of the recent health care reform, the hospital executive
suite is faced with a number of new challenges. It is evident that
in order for hospital organizations to continue to thrive, they
must adapt their structure and way of conducting business.
So far, executive reactions and approaches to addressing these
top issues have been scattered. Undoubtedly, the challenges
are diverse, far-reaching and somewhat unnerving. But it
is important to remember that with every issue also
comes an opportunity. With the right approach and the right
partnerships, the hospital C-Suite can successfully tackle and
overcome all of these obstacles on the path toward value-based
health care.
Sources
Accountable Care Facts. (2015). What are the barriers and
challenges such organizations might face?
– Accountable Care Facts. Retrieved 15 September 2015,
from http://www.accountablecarefacts.org/topten/why-is-
health-care-delivery-reform-as-proposed-in-the-affordable-
care-act-necessary
AIG. (2013). Patient Safety; Hospital Risk Perspectives of
Hospital C-Suite and Risk Managers.
New York: AIG. Retrieved from http://www.aig.com/Chartis/
internet/US/en/Patient_Safety_Hospital_Risk_tcm3171-
642502.pdf
Brown, J. (2013). Top 5 compliance concerns.
Managed Healthcare Executive.
Retrieved 15 September 2015, from http://
managedhealthcareexecutive.modernmedicine.com/
managed-healthcare-executive/content/tags/compliance/
top-5-compliance-concerns?page=full
ECRI Institute. (2015). 2015 Top 10 Hospital C-Suite Watch
List. Plymouth Meeting, PA: ECRI. Retrieved from https://
www.ecri.org/Resources/Whitepapers_and_reports/Top_
Ten_C-Suite_Watch_List_2015.pdf
Geffner, C., Corwin, C. (2014). Hospital C-Suites: Leading
Disruptive Change. Newpoint Healthcare Advisors Witt/
Kieffer. Retrieved from http://www.wittkieffer.com/file/
thought-leadership/practice/Hospital%20C-Suite%20
Whitepaper%20E-version.pdf
Vaidya, A. (2014). Top 7 Strategic Priorities in the Hospital
C-Suite. Becker’s Hospital Review. Retrieved 13 September
2015, from http://www.beckershospitalreview.com/
hospital-management-administration/top-7-strategic-
priorities-in-the-hospital-c-suite.html

4. 4