New Challenges May Present Opportunities for the Hospital C-Suite

This is the first in a continuing blog series based on the findings from the Sodexo 2016 Healthcare Compendium, a compilation of research that examines the increasing trend toward a focus on value in the healthcare sector.

The healthcare industry has changed irrevocably and hospital c-suites are grappling with new responsibilities as well as the complexities of creating a new continuum of care.

The challenges are formidable. The Hospital Readmissions Reduction Program established by the Affordable Care Act (ACA) penalizes hospitals for patients who are readmitted within 30 days of discharge by a reduction in Medicare payment of up to 3%. In 2015, roughly half of U.S. hospitals were penalized under the regulation, altogether losing an estimated $420 million. Hospitals are under financial pressure on other fronts as well, challenging their executives to balance the imperatives of patient safety and satisfaction with financial stability, all of which create substantial risk. Then there are the operational challenges that keep hospital CEOs awake at night, including rising costs, declining reimbursements and labor shortages.

Patient consumerism has been a factor for at least a decade—patients judge a hospital by the quality of their overall experience, not just by the quality of the medical care they receive. The result is that hospitals are competing for patients by offering unconventional services such as community classes, catering services, day care services and exercise classes, which may not help the bottom line but 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 new challenges.

Existing systems are being pushed to the breaking point, and administration of these new models requires next-generation healthcare IT, strategy and new ways of thinking to make them automated, scalable and cost-efficient. All of these strategies are intended to benefit the patient and consumer as they are all driving toward providing a better quality care in the appropriate setting at the appropriate cost—a win for all.

Sodexo is committed to playing our part to help hospital administrators at this critical time. We are testing new models and services, learning what works, and rapidly scaling successes by working with both the private and public sectors to deliver improved care that will result in a healthier population. Value comes in many forms—but most importantly, at the heart of everything is the patient and the care they receive in a safe, comfortable environment conducive to healing.

Calvin Johnson is President of Health Care Systems for Sodexo North America.  Mr. Johnson is committed to increasing knowledge and awareness on how individuals, organizations and communities can enhance their Quality of Life by improving their health and well-being.