Hospital Administration Is Feverish Entrepreneurship

Leading Kentucky’s hospitals amid today’s constant change takes multiple skill sets, talents, smarts and quick thinking

By Dianne H. Timmering

Maybe a new job design for hospital administrator should start with “Disruptive CEO needed: Must have operational finesse, government awareness, daily fortitude, innovative muster, partnership advancement, strategic relevancy, patient endearment and the intrinsic motivation to blend it all together in a balancing act that not many tightrope walkers could master.”

Hands-on health-care facility executives in Kentucky are dealing with implementing ongoing, major technological changes for provider systems in a state that’s also seeking solutions to some of the worst population health metrics in the United States.

While the ubiquitous term “health care” casts a very wide net – taking in a sixth of the $20 trillion U.S. economy – the hospital industry is an ocean all to itself. And with Modern Healthcare magazine headlines like “Hospital CFOs losing confidence they can adapt to new business models” and “Grappling with the reality of the hospital’s diminishing role,” the traditional part hospitals play in the health-care continuum is shifting from its transactional past into a transformative future.

Survival challenges are ruthless and include revolving government mandates, shifting reimbursement sands, payer revolts, data inconsistencies, physician relations, staff wars, transparency demands, technological advances and consumer-driven value frameworks. New administrator skill-sets and job experiences need an ever-increasing depth of variation, more width of empowerment and a broad imagination. And maybe a little bit of prayer on the side.


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That’s the future facing a “hospital administrator” – a title that might be growing stale, not because it isn’t worthy and noble but because it denotes operational silos of the day to day. The term doesn’t quite encompass the broad skills needed to lead with a new executive-style dynamism and impact.

“In the world of executive leadership, we now need to prepare people to function in a much broader organization, as hospitals are being integrated into health systems across the nation. A minority of health systems are now stand-alone,” said Dr. Larry Prybil, distinguished professor in the University of Kentucky’s College of Public Health.

“Today we need the skill sets to work with many issues at one time, from services to physicians, while balancing the strategic planning process,” said Tom Miller, president of University of Louisville Health. “With access to care a No. 1 issue, we need to be entrepreneurial in our approach on how to meet that need.”

“I truly vacillate between strategy and daily operations,” says Bruce Tassin, CEO for CHI Saint Joseph Health System (known until January as KentuckyOne Health) and president of Saint Joseph Hospital in Lexington.

Medical knowledge remains important as well.

“Not only do they need to be entrepreneurs to operate, they need the clinical experience to navigate the value equation and balancing costs,” said David Gray, a 30-year Kentucky health-care executive who is director of provider relations for the Cabinet for Health and Family Services. “There will be more physicians and clinicians in those leadership roles. Consider Cleveland Clinic and Mayo (Clinic); both are led by physician-executives today.”

‘No two days are the same’

Commonwealth health-care leaders increasingly agree that future Kentucky hospital leaders must be entrepreneurs – a word associated with the renegade independence of innovators – and that they must keep this approach in mind while administering daily functions of core operations like patient safety, performance metric reviews, daily rounding and physician relations while also balancing new ventures, policy challenges, medical talent recruitment and strategic planning all while the speed of change zooms and flutters around them.

Beyond traditional health-care competencies, being a hospital administrator takes “an entrepreneurial mindset,” according to Mike Rust, president of the Kentucky Hospital Association. “For a hospital CEO, no two days are ever the same.”

UofL Health’s Miller agrees.

“A hospital administrator must have the functional capacity to work on many different skill sets at different times,” Miller said.

“The definition of the patient is evolving and we need to keep up,” said Dr. Phillip Chang, chief medical director for UK HealthCare.

Most Kentucky hospitals are among the largest employers in their communities, so the administrator needs some level of motivational talent, a passion for vision and mission, and the ability to instill that passion and mission in the hearts and minds of the frontline team.

“We are working with thousands of employees every day,” Miller said. And having “interpersonal savvy” helps, agrees Tassin.

With so many functions and systems in a hospital, motivating teams is important to the success of day-to-day operations and cost efficiencies, along with patient safety and good outcomes. It involves 7 a.m. medical staff meetings, staff huddles and meetings with directors on daily objectives to motivate, collaborate and provide organizational direction to start the day right. And that’s all before 8 a.m.

“CEOs must spend a lot of time on team building for the organization,” Rust said, “not only finding the right persons for the job but staying in touch with them to ensure that the work is being completed and that they are receiving the resources they need to be successful.”

Leaders building their teams must have the courage “not to pick top talent just like you but have diversity of skills and unique ways to craft the pathway of success,” Tassin said. CEOs need to have the boldness that when knocked down, they get back up and are not afraid to adapt. In some cases, that includes shifting direction and some on-the-job training. With the rapidity of change, mistakes are going to happen; it’s what leaders do with those mistakes that counts. A willingness simply to try more things is where that entrepreneurial fortitude is most handy.

Eye for talent is always open

With current workforce shortages across the country and succession planning for key leaders in the organization, administrators have to develop a practical habit of continual exploration to recruit talent for medical staff and other practitioners.

Patient awareness requires not only the right people in place but systems for daily rounding, visitation, and physician and staff engagement on and off the floor. The administrator is the mayor of immediate circumstance and crisis management as head of the hospital town.

“We have a cross group of professionals (we work with) to meet the needs of our patients,” Miller said.

When there’s a problem, they address it then, not in a punitive way but in a constructive manner so that processes improve, he said, adding that the imperative is to do it immediately.

“It doesn’t do anyone any good if a system isn’t working to not fix it,” said Doug Winkelhake, division president of hospital operations for Norton Healthcare. “Directness (is key) to look across the system and standardize the process, to talk about it.”

Norton recently created a quality and operational committee within its systemwide team to tweak protocols, Winkelhake said. It works with system support and physicians for collaboration and accountability, ensuring input within a work group to not only address the problem but to fix it.

The future skill set of hospital health-care leaders is increasingly relational. Traditional communication silos have beleaguered health-care delivery in the past, with each caregiver in a delivery system often in their own corner of provision. With government issuing consumers new choices in the ongoing move to value-based operation, the shifting model of care delivery demands a balance of care quality and cost efficiencies. And this can’t happen without the collaboration of many.

“We are receiving better access to data but not using it largescale yet to improve the health of the state,” said Michael Stigler, a financial advisor and Louisville office director for Blue and Co. whose experience includes developing a company that now advises 22 rural hospitals in a multistate area on technology and supply chain efficiency. “But this may be changing. The Kentucky Health Care Collaborative is looking for ways to share data related to costs of operations and participate jointly on data, purchasing services, even health-care supplies and pharmaceutical costs.

“They might assess a joint venture for a lab operation or lab corporation based on volume and demand for services in toxicology and microbiology,” Stigler said.

Special MBA tracks

In the last few years, UK’s College of Public Health and its Gatton College of Business and Economics partnered to create a health-care business track for physicians, nurses, technicians and administrators.

“We get them in an academic cohort setting,” says Harvie Wilkinson, MBA director for the Gatton College, “which stimulates the flow of ideas, collaborating across systems like CHI Saint Joseph Health and Baptist Health in Lexington along with several clinics and post-acute partners. Barriers come down. That’s one of the secret beauties of the (new MBA) track.”

Wilkinson gave the example of a health-care economics course where teams of students addressed the rising cost of pharmaceuticals, physician shortages and efficiencies in certain operating rooms, with each team made up of different health-care systems.

“At the end of the semester,” he said, “they submit their findings, presenting in-depth deliverables in health-care economics.”

Consensus building isn’t left only for the classroom or in-process improvement workgroups. It is part of community and government relations. The evolving design of American health care is a publicly funded and insurer-constructed behemoth.

Administrators, Rust said, “are often the face of the organization to the community (for) 15-20 percent of their time.”

But wait, there’s more. Seeping more and more into the expectations for an administrator is government relations’ and networking, with key policymakers driving change at the local, state and federal level. Necessary calendar items in the day-to-day strategic maneuvering of the hospital administrator include staying atop compliance alerts, policy and reimbursement issues, and items of statewide or national interest, not to mention future forecasts of what might be coming.

Reading the tea leaves – and lots of them

In addition to motivating an army of physicians, nurses, technicians, communities, and government folks – no small feat – an administrator must understand the analytics of the business, which requires adeptness, flexibility and systems thinking. Reviewing performance metrics from the previous day like utilization, admissions, discharges and outpatient registrations requires analytical skills not only for the day-to-day operations of the organization but understanding the marketplace around the facility and system.

As hospitals delve into ancillary lines like skilled post-acute services, telemedicine, physician integration and home health, critical thinking skills and prioritization will play roles, too, in the balance of daily operations and business alignment. Both assessment and integrative thinking may become the skill-set most heavily prized. Developing an ability to read the tea leaves of informatics data pouring in may be one of the strongest skills to master in this brave new shifting paradigm.

“Data is all over the place,” Prybil said. “What boards and executives and clinicians need today is the ability to take the data and transform it into information – whether utilizing it to treat a patient or make a major policy decision. This is a vital skill that we are striving to impart into health-management students.”

While all agree that disruptive thinking is a critical mindset, Dr. Julia Costich, professor in UK’s Department of Health Services Management, cautions that disruption needs to be managed with the development of proper critical thinking and management frameworks; a leader can’t just leap into every disruption that comes along.

“Leaders need to be able to analyze,” she said.

The master of health administration curriculum at UK, according to Costich, creates the critical-thinking skills to understand policy and legal environments and financial and quantitative skills needed to really assess disruptive propositions.

And that leads us to the final – but not last – act in the balancing exploits of the administrator turned superhero: the ongoing management of financials.

Within the past five years, Gatton College has reshaped its business tracks with more focus on health-care issues and the economics of doing business.

“If you don’t understand the economics of health care,” MBA Director Wilkinson said, “it is very difficult to be a health-care administrator for an independent hospital or a hospital system or a clinic, large or small. The business model has changed so dramatically. How to develop efficiencies without giving up any quality? We cannot jeopardize quality.”

“Know your financial statement and volumes,” Norton’s Winkelhake said.

Rust agrees. Today’s operational financials include “capital needs … budgetary restrictions, payment for services, including contract negotiations and managing philanthropy, fundraising and foundation activities,” he said.

The Healthcare MBA helps students understand the economics behind the health-care system.

“Even the accounting course is very health-care focused,” says UK HealthCare Medical Director Chang, a Gatton College MBA graduate who focuses on compliance and related health-care financial mechanisms.

“Because the federal government is so involved with (much of) the reimbursement through Medicare and Medicaid in the already highly regulated environment we operate in, we must be entrepreneurial in our approach and know how to balance the financials,” UofL Health President Miller said. Even the traditional chief financial officer role is changing as the CFO becomes “less of a bean counter and more strategic minded,” adds Tassin.

The new, 2.0 version of Kentucky hospitals and the health-care model as a whole is emerging. With the value-based care tsunami that everyone is preparing for coming, hospital administrators will need to be prepared.

That likely won’t happen in just one place, but through the incubation of ongoing dialogue, collaboration and an entrepreneurial resiliency in engaging new “architectural designs” of patient-care delivery, utilizing unlikely allies and untapped resources. Draconian thought processes are being cast off as administrators turned superheroes launch into new creations of care and new visions of how to lead them.


Dianne H. Timmering is a correspondent for The Lane Report. She can be reached at [email protected]

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