Healthcare providers, traditionally among the most trusted institutions in society, are facing unprecedented scrutiny from regulators, the media, the marketplace and the people they serve. But despite the narrative, this high-pressure moment says more about the state of the industry writ large than than any specific player – particularly providers of care.
In this week’s High Stakes Podcast, industry veterans David Jarrard and Teresa Hicks discuss the ripples that led to this watershed moment, as well as smart ways that healthcare leaders can navigate the choppy waters of high-visibility issues.
- Many of the issues in question are nothing new. There have always been unbalanced expectations of what it takes for providers to deliver world-class care that solves the health problems of their communities while remaining financially viable in a competitive market. The high scrutiny of this moment has more to do with external factors that exacerbate these challenges, such as high inflation, the increasing political divide and viral media stories of bad experiences in medical settings.
- The industry’s continued transformation is levying new expectations on providers. From the simultaneous rise in healthcare costs and bipartisan efforts to lower them, to the introduction of new technologies, to the progression of value-based care, the complex changes reshaping healthcare are reframing what it means to be a provider. Their work now extends beyond just medical services to encompass education, transportation, housing, nutrition and more.
- Scrutiny gets even more complex when there are many voices at the table. Even as they navigate the same issues, hospital stakeholders can have vastly different strategies for solving them. Medical professionals and board members, for example, often have contrapuntal priorities. This can lead to infighting and frustration that does nothing to improve care.
- Crystal clear communication, as always, remains key. Healthcare, from any vantage point, is complex. When addressing issues, healthcare leaders should tailor their points to audiences in a way that leaves no room for misinterpretation. Remaining decisive, sympathetic and smartly transparent is critical in every public-facing statement.
David Jarrard: I’m sitting here with my friend Teresa Hicks who has spent her career both as a reporter and inside the halls of healthcare thinking about this industry. And she’s joining me around the table, who has spent my career as a reporter and on the inside of healthcare thinking about the industry and the challenges it faces. And I don’t think either of us, Teresa, have, I don’t know, experienced a time when the providers of care have faced such incredible scrutiny.
I know we’re in this moment of societal distrust and misinformation and malaise and every organization and institution is getting caught up in the fervor of this and getting wounded and damaged by it.
But in 30 years that I’ve been working, hospitals and healthcare have been the most trusted institutions. They have been the pillars. And doctors and nurses for sure and everyone who wears a white coat and serves. But I’ve never seen a time quite like this when even some of the foundational elements have really been questioned like this.
I don’t know. What do you think?
Teresa Hicks: The phrase existential crisis comes to mind. And it feels like that’s where a lot of our clients are, that’s where the industry is. It’s a moment of definition of who are we as healthcare providers? What role do we play within the system of healthcare and health because it’s a broader picture than just the care that gets delivered.
But I think what we see health systems grappling with are some of these existential questions on a whole different level. When we think about the disruptors that are coming into the market, when we think about the pressures that our clients are feeling and they’re not unfamiliar pressures, right? We’ve always grappled with financial stability. We’ve always grappled with what should our service offering profile look like in the community. But the stakes just feel like they’re so much higher in this moment because of all of the other things that are going on within society.
The pressure that inflation puts on the whole picture, the pressure of some of the… just the volatility and just the way that people are talking to each other, the way that they’re treating each other. And we’ve seen headlines about incivility and rudeness. And people just feel like across the board, they’re losing patience. And I feel like some of the creativity and problem solving begins to be compromised when people are under this much pressure.
David Jarrard: It’s true. And I love you’re phrasing, “existential.” And we’re both word people, right? And we’ve been in healthcare for a long time. So, we know hyperbolic languages like part and parcel of our industry and everything is unprecedented. The first time there’s never anything done like this before.
And yet it feels true. Now, it feels like existential, meaning are we going to continue to exist as an organization or do the fundamental things that we’ve done is really in question? I wonder if healthcare itself is in being redefined. What is it? What does it mean to be a healthcare provider now that everyone is? And if healthcare is education and transportation and housing and access and literacy where does it end and where does it begin? And what does it mean for these people who have buildings and surgical suites and gloves that they have to buy and patients that they have to see?
Teresa Hicks: And I think we’ve been talking about transformation for decades, right? And we’ve been talking about value-based care for a long time, having one foot on the dock and one foot in the boat, and I think the imagery there implies sort of immediacy. Like the action, the transition is imminent.
But how long ago was MSSP and this sort of, ACO value-based concept introduced? It’s been more than a decade ago, and we still haven’t made that transition but there are other transitions that are happening, whether we’re ready for them or not. With other disruptors, like Amazon and CVS, coming into the marketplace with, the payers becoming providers, this payvider trend.
And so, I think that your traditional hospital systems and healthcare providers, as we have known them for decades, are finding themselves facing different kinds of transformational challenge than I think they thought they were prepared for a decade ago.
David Jarrard: Great. I think the pandemic accelerated this and the cost of care. We spend 4.2 trillion dollars a year. Half of it goes to providers of care, right? And when we look at the politically oriented polls thinking, talking about what are the issues that people have on their mind, the cost of care, the cost of healthcare continues to be like high on the list. Inflation and some other things as well, which makes it a political issue.
And one thing that’s really struck me about this last season that we’ve been in is it’s been a bipartisan issue. Whether you’re on the left, or the right, sort of wherever you come from the political spectrum digging into healthcare and healthcare providers I don’t know. It’s seen as a positive. It’s seen as something that there’s political permission to do. I don’t know, which should get everyone’s attention
Teresa Hicks: Yeah, I agree. And I think it’s… I sometimes can be of two minds about that. Because as a patient, as a citizen of this country thinking about, the moment being ripe for change and, thinking about bipartisan movement, can we work together on something, that’s encouraging.
But as someone who represents providers and is in the trenches with them, thinking about what does that change actually going to look like? What does it mean for us and our ability to continue to care for our communities in the way that we know how to do best? It’s dangerous because a lot of the voices that are at the table, some of them are angry voices, right? A lot of those voices at the table maybe don’t have the same priorities in mind.
David Jarrard: Not the best interest of the healthcare provision in their mind?
Teresa Hicks: Imagine that right? But, I think, if you think like a physician who has the best interest of the patient at heart, I think you can look at that conversation and scratch your head a little bit thinking a lot of that rhetoric sounds good, right? It sounds like maybe it would be beneficial for patients. But when you think about implementing it, the disruption that would have to take place to overhaul the entire system, overhaul the way that we pay for healthcare completely, increase the availability of charity care, right?
When you think about actually how that plays out in real life, the pain to get from here to there, even if we agree on what there is… that transition and transformation is going to involve a lot of disruption in where the facilities are, which facilities are open or closed, what service lines can be offered in a community, because you can’t just spring change on an industry like that without having a roadmap for how to get to that desired end state.
David Jarrard: And one of the challenges I think is in translation that people have a sense, almost a philosophical sense of what healthcare should be. It’s like what education should be. This is the way healthcare should be delivered. This is the way charity care ought to be. And so, there’s a number of assumptions that are brought to the table.
But then the solutions that follow those assumptions do not reflect an appreciation of this Byzantine Rube-Goldberg approach that we have to paying for care. And it becomes a clash instead of a solution-oriented discussion. And it gets into some very specific issues. Teresa, could you walk through some of the things, the specific things that hospitals are dealing with that all fall under this umbrella?
Teresa Hicks: Sure, yeah. We’ve mentioned charity care, and I think that’s making a lot of headlines and it’s something that is, I think a necessary and important part of this national conversation. And it ties into a lot of other aspects of the way that we pay for healthcare, and who pays for it and how. And so, thinking about, the way that health systems and hospitals and providers are billing patients and the amount that’s on that bill, the cost of care, they’re grappling with that.
And that leads to this broader more existential question, especially for our not-for-profit providers that we work with, where their tax-exempt status itself is being called into question. In really at risk of saying the word unprecedented it’s really an unprecedented way their tax exemption is being challenged. And it’s being challenged on terms that are maybe not terms that everybody agrees on as like the playing field for this conversation, right?
And so, there are a lot of voices that want to equate the value of your tax breaks with the value of the charity care that you provide and that is a vastly oversimplified form of that equation, right? But it’s something that the public can understand very easily. Policymakers can hold on to that. It’s a great platform to talk about, right? But, again, when it comes to actual practice, does it make sense?
David Jarrard: It means great emotional language. Charity care, being a charitable organization, getting, in a position where you don’t have to pay taxes. There’s great emotional heft if you’re a political thinker to bringing yourself to one conclusion or another or activating supporters. But it doesn’t reflect the true hard work of how we pay for healthcare today. And we can talk about the model being broken and the money’s not working the way they’re supposed to, but we use them anyway to manage the system, so we continue to provide care. It’s a hard story to tell.
Teresa Hicks: It is, and there’s not a lot of empathy for the business of healthcare, or the elements that these leaders are trying to balance. But ultimately, if you’re running a health system, you want to be able to care for your community. And that means being able to care for individual people, right? And charity care is part of that, making care affordable is part of that. Improving the health of the community is part of that when it comes to population health.
But how do you balance that with your need to remain solvent? And the phrase, there’s no mission without margin, is true. It’s a little tired, like people are tired of hearing that. It doesn’t make a great argument anymore, but it doesn’t make it any less true. And so, I think, when we think about what’s keeping these executives up at night, it’s that. It’s how do I balance margin with mission? How do I, serve my community in a fair way without going bankrupt and having to close facilities? That’s not good for patients either.
David Jarrard: It’s really tough. You can talk about how tight margins are but if you’re driving past the hospital with the big brand, you see the cranes and the buildings going up. There’s a little disconnect right between what is sometimes said and what the optics are. But sometimes there’s not a conversation happening at all. So, the cranes and other things exist in a vacuum.
We run surveys all the time and states asking questions about community benefit. Because it’s important to the reputational value of our organizations and leveraging their political strength. Where we find more and more that only half of residents think these hospitals are delivering like true community benefit, that they’re bringing value that’s worthy of their tax exemption, for example.
This surprises on one side, given the media coverage that we’ve seen down there. On the other side, these brands have been in these communities for 100 years, and only half of the folks think they’re getting value. They’re a true community benefit from these organizations. Seems to be a lost opportunity there. Something more to do.
Teresa Hicks: Agreed. And I think another interesting question to ask would be how do you know if your hospital or health system is providing adequate community benefit, right? Because these healthcare marketing and communications teams spend a lot of time and resources building these beautifully designed and articulately written community benefit reports.
How many people really do you think read those reports? And even if they did, would it land, right? I think it’s important to recognize when you ask the public a question like that, they’re drawing from a very limited pool of data and experience, and a lot of it is their own experience.
We did a survey with a client last year, and we were talking about patient preference and what drives patient decision making and things like that.
And we asked them what factors do you care about when you’re choosing a provider? And, predictably, cost was there, quality was way up there, right? And then we asked that next question of how do you know if a provider delivers good quality care?
Thing that really they leaned on the most was their own experience. They said, I know if a provider delivers good quality care by my own experience. That is equating patient experience with care quality. And I think the same can be true for the way that communities and people and patients experience the cost of care and the value that the provider delivers in the community.
I know if they’re delivering adequate community benefit based on my experience. What I experienced them doing with me, and to me, and for me, and what I see them doing with my family members and my friends, right? And a lot of that is what shows up on the bill, or the conversation that they have with the call center when they go to pay their bill, or they have an issue with their bill. There’s a lot riding on some of those conversations, I think.
David Jarrard: And you said it’s them and their family and their immediate community are this small circle, that even though trust is being broken in so many places, this is the go to foundational place where people feel like they still can trust what’s being said and act on it and if nothing else will act on this. It’s hugely important.
And so, into this vacuum then can come real threats to an organization. Unless there’s an appreciation of what it costs and why these prices are the way they are, we see other actors and lawmakers acting in that vacuum.
Charity care is certainly one of these issues. We’ve seen AGs and others begin to look closely at exactly what these standards are and what are reflected. But what are some of the other issues that our organizations are facing out there?
Teresa Hicks: When we talk about these executives trying to balance “how do I serve my community adequately without going bankrupt and still have a margin,” there are a lot of things that they need to do, that they must do, in order to adapt in these new environments.
So, consolidation is one of them. Consolidation is absolutely a must in a lot of cases for healthcare providers. Especially for independent hospitals, or rural hospitals, or rural systems if you look at the factors that they’re contending with right now, it is truly a no-win situation, right? So, consolidation is the only answer to their continued existence.
But all the way up and down the chain consolidation is getting a lot of scrutiny. And in some cases, rightfully so. Consolidation’s not always a good thing, it’s not a panacea. But in a lot of cases, it’s necessary. And we see our clients a lot of times grappling with a lot of different facets of the sort of persuasive conversations that have to take place with your community, with your business leaders, with your lawmakers around consolidation. And those are really difficult conversations to have.
David Jarrard: They’re difficult because the issue can be extreme on one side because of consolidation. A clinic or a hospital can stay open that ER continue to exist. On the other side, prices can double. And sometimes those things are actually related because we needed a little more money to keep these doors open.
So, it’s not an easy sort of political black and white conversation you can have. There has to be nuance to it and real engagement.
Teresa Hicks: And I think that the conversation about that is not nuanced enough at all.
David Jarrard: Okay, so big existential questions. And like all these conversations we’ve been having, they’re all about money. It’s all about money and dollar signs and little bags of gold. Now everything that we do to pay for healthcare whether it’s consolidation, it’s kind of money situation, or billing and cost of care, and payer… it all comes back to how are we going to pay for healthcare and who’s going to pay for it? And how do we know that we’re getting the best value for that dollar?
So is the right solution for a health system of almost any size to, I don’t know, Teresa, run a big ad campaign that explains dollars? How do they get started? How do they have this conversation that you’ve been talking about?
Teresa Hicks: Oh, that’s so hard to do. That’s so hard to do. Especially because the public’s appetite for that conversation is less than zero. Less than zero because the public, they have their own financial issues, right? I’m trying to balance my budget. I got to take my car into the shop for repairs, my house needs repair. And so, the public has no patience for that.
And one of the hardest things is educating someone about something that they don’t want to be educated about. And I do think that there’s, and rightfully, there’s a deep desire among healthcare leaders to educate the public. They think if only the public understood. If only all these players that are criticizing us understood what we’re dealing with they would see that we’re doing the best that we can, that we’re trying to do the right thing. And that’s probably true.
David Jarrard: But what do you do when your balance sheet shows that you’ve made a hundred million dollars last year, even though that’s a 1 percent margin, it’s a hundred million dollars. It’s really hard to have this conversation in any kind of way that gets sympathy from the public.
Teresa Hicks: It’s really hard. It’s really hard. And so, I think, you have to meet people… match up the right conversation with the right recipient for that information, right? And you have to meet them with information that they’re willing to accept, at a time and in a way that they’re willing to accept it.
And so, we encounter this a lot with, in payer negotiations. We do a lot of work with clients who are in negotiations with these large commercial insurance companies. And again, the stakes have never been higher in terms of the outcomes of those negotiations. Our clients have to get a fair deal with these insurance companies. Or else they do, they really do risk closure of facilities or closure of EDs or having to scale back on, critical services.
But these are highly emotional conversations, and they are in fact about money. That’s what these payer negotiations are about by necessity, right? And so how do you talk to the public about this? This is something that directly affects them, it affects their access to their physician that they trust.
And what we find in those particular settings is there are some audiences that are interested in the nuances of how healthcare gets paid for, right? And the business elements that these leaders are grappling with. Those audiences include employers, particularly your large self-funded employers that, that have… they’ve got their self-funded insurance plans, right? And so, it’s directly coming out of their pocket. They understand the nuances of the business and it matters to them how healthcare gets paid for. And so, you can have those nuanced conversations about, here’s what we’re facing in this negotiation, in this landscape here’s why we need a fair deal. Here’s what it would mean if we don’t get a fair deal, right?
When you’re talking to patients though, you really have to lead with what matters most to them. And what matters most to them is can I continue to see the doctor that I know and trust. They do not care, honestly, they don’t care, whether their health system is being paid fairly because they feel like they’re the ones paying for it. And to some degree they are, right? In a lot of cases, it’s the employer or it’s the federal government that’s really, paying most of the tab. But the patient does get a bill and so they feel like it’s the dollars on my bill that I care about and it’s also, the face that I’m going to see when I go to the doctor.
And so, you have to talk to them within that framework, and sometimes you have to hold those arguments those nuanced conversations for the audiences that are prepared to receive them. Lawmakers are another one. You can have those nuanced conversations with your policy makers you can sit down and have that conversation. And so, I think it’s a matter of directing the information to the right audience at the right time.
David Jarrard: So which is better, to have the conversation in the heat of the moment when the battle’s joined, or before the battle is joined, when you can anticipate that’s coming?
Teresa Hicks: That’s a great question, David.
As you always like to say, you want to buy your umbrella when it’s not raining, right? It’s great advice. But it is true. And I think, more and more the clients that we are working with are not only recognizing the value of that, but really putting their energy into that. We’ll get into a payer negotiation, right? And we get into the thick of things, right, where it really matters. The stakes are high, and we think, oh boy, I wish we had this conversation six months ago or twelve months ago with this employer, or this insurance broker, or this elected official.
They’re starting to get to the place where they are having those conversations six, twelve months in advance. And I think preparation is key because you can talk about the bigger issues, you can paint the picture before you’re having to explain something that’s going to negatively impact the person you’re talking to. So yeah, always a great idea to be prepared.
David Jarrard: It’s an important point because of what we’ve been talking about, it’s such a complex story, and it has so much nuance. And it involves money and monies that move in certain ways based on certain criteria.
And it’s not a conversation you can have once and feel like your message has been delivered. There has to be a real engagement, a real dialogue. A real, I don’t know, connection where people can ask questions and not be clear, and then not be clear, and then become clear.
And through that, not only can you get your message across, but you can have, you can create a relationship where people can ask future questions. And once you’ve set that table I don’t know, you put in place how future conversations are going to be held. You set expectations about who you are and your humility in the market. I think that’s politically important.
Teresa Hicks: Yeah, agreed. Another thing that comes to mind is how do we communicate with news media about these really tough topics and there’s a broad spectrum of news media. There’s your local media and then there’s your national publications and trade pubs that are tackling these issues, in a very nuanced way in a lot of cases. But I think when you’re talking about media, it can be sometimes a mix of having to pare the message down to its most essential elements.
David Jarrard: Its most elemental forces, yeah.
Teresa Hicks: Yeah. But there are some places where you can get into nuance with certain reporters or certain editors, right? But I think some of the things to remember when you’re thinking about communicating with news media about these issues that involve money is breaking it down into sort of bite sized points that you want to make. And you may only be able to get one or two points in a story. So, you can’t have an entire thesis that you want to try to get across to a reporter, because they don’t have this, even if they listen to you, they don’t have space to print it, right? So, you’ve got to break it down into bite sized points.
But then the other thing to do, and a really planned media strategy thinks through these elements, is you don’t want to be the only voice saying whatever it is that you’re saying, right? To have third party folks speaking for you, because in a lot of very real ways talking to the news media is talking to the public. And so, you have to say things in a compelling way. You have to appeal to emotion, because that is how people make decisions, unfortunately and truly. You have to have stories to go on, to make your point.
And so it really takes a comprehensive multifaceted strategy when you’re thinking about how do we deal with news media on these issues of money?
David Jarrard: And it’s the same approach or it’s a, it’s an identical approach for all the issues we’ve been discussing, right? Because there’s one set of news media. There’s one set of opinion leaders in the community. You have one group of colleagues and physicians that you’re working all these issues against, right? To be in conversations allows you to deal with a variety of issues. So, getting ahead of it actually will be, I don’t… inoculation is too strong a word because there are troubles now and troubles ahead. But boy, it’s good groundwork for everything that you’re going to have to deal with.
Teresa Hicks: Yeah, it’s opening the lines of communication with them just so that you’ve got faces and names and numbers and ways to reach these people. And just having avenues of communication is a significant win in this case.
David Jarrard: It is a significant win. And to the point of engaging in these conversations now we certainly have worked, you and I both with health systems, who have been ready to do this as soon as it was needed. As soon as the issue came up and there was enough pain that they actually felt like they needed to invest themselves in this work.
And so, if anyone is wondering whether these questions are going to come, whether the scrutiny is going to arrive, whether lawmakers are going to do this or media is going to do that, I think they can rest comfortably knowing the questions are going to come. It is inevitable, right?
Teresa Hicks: Oh, for sure. Yeah. It’s not a question of if, it’s when. And how prepared will you be? And who will you have on your side when it does come?
Thinking about the hundred-year history in some cases that these systems have, yeah, it can be an asset. And our clients are really… we see them slogging through these outdated, outmoded systems and no one individual leader can break through that and transform the entire system, right? Transformation takes a long time, clearly.
Do we wish it was faster? Absolutely. Do our clients wish it was faster? Definitely. And I think one of the things that we have to do is just take that into account. These leaders that we’re working with are working within a system that is just not a well-oiled machine. And it’s not their fault, it’s a system that they inherited, and they’re trying to make it better but it’s a challenge.
David Jarrard: It is a challenge. And I think the brands can be extremely beneficial in this conversation to what these health systems need to accomplish. I think we have built, we, our health systems, have built such sort of grace and goodwill through the brands that there’s a receptivity to us as a branded organization versus those that are still trying to find their way, like to even demonstrate their value. If you know this is the brand organization, it comes with at least a modicum of trust that you can lean into and use.
Teresa Hicks: And those brands and the affinity for them are not built by a logo or by a hospital building. The affinity that exists for some of those brands are built by relationships. And relationships that are handed down through generations. My mom delivered a baby at this hospital and then I delivered a baby at this hospital, or, this doctor took care of my grandpa and now they’re taking care of me. And it’s all about the experiences and the trust that is built through those experiences.
And so, I think one thing that I would say when thinking about brand equity, and public trust, and affinity is don’t underestimate the value of the human faces that actually are the embodiment of your brand. It’s the people. Yeah. The people who are providing the care. It’s the physicians, it’s the nurses, it’s EDs. It’s all that. It’s the people that help you park, right? All of that matters and that is your brand.
David Jarrard: So, you’re saying the brand has to be re-earned over these experiences people have with you.
Teresa Hicks: Yeah, and if you want to nurture your brand you’ve got to nurture your people. And that’s a whole separate podcast.
David Jarrard: Stay tuned for chapter two! But I completely agree. And I’ve worked with organizations who have had a crisis, like a terrible event in one of their… or there’s an individual who did something wrong or a patient who had a bad outcome and they wonder, did this affect our brand? Did this affect our reputation? And we would do surveys based on that concern to answer questions that they may have had.
And sometimes it did, but it was really rare because it was a unique event that was in contrast. It was very different from the united experience that people were having throughout the systems. And so, it created this cushion, this momentum.
The conversations we’re having today, the issues we’re talking about today, these are systemic issues, right? They’re being… they’re touching patients throughout the market and politicians throughout the market. And it has a different kind of impact, I think, on brands. And I think brands have some impact here but are more vulnerable than some of the crises we’ve dealt with in the past.
I can’t tell you what a joy this has been to spend some time with you here. This is great.
Teresa Hicks: Yeah, really fun, yeah.