The Healthcare Hub

GHX provides a wide range of perspectives on how greater collaboration and visibility across the supply chain can improve both clinical and financial performance in healthcare.

Wednesday, March 30, 2011

ACOs Create New Leadership Challenges

There is certainly no shortage of educational programs available on accountable care organizations (ACOs). I personally have attended at least 3 webinars and 2 conference presentations in the past couple of months, not to mention a myriad of articles that I have read on the subject. Most have been very informative, raising a number of issues that healthcare providers will need to address to make this new model successful, such as how to fully understand the total cost of providing care across the continuum. One issue I have not seen addressed relates to the skills that will be required of those leading ACOs.

Healthcare executives will need to guide not only their organizations, but also their business and clinical partners, in an unprecedented exercise in change management. This is particularly challenging when those leaders themselves are changing. According to the American College of Healthcare Executives (ACHE), annual turnover in hospital CEOs grew to 18 percent in 2009, the highest it’s been since 1999, with little indication that trend will change. Many baby boomer executives are expected to retire in the not too distant future, and with the challenges facing them, many say they may retire sooner than planned.

So who will (and who should) take their place? The career path that many healthcare professionals have taken historically does not necessarily give them the skill set they need to envision new business models and then forge the kinds of partnerships required to turn concept into reality. Today, leaders need to bring together organizations and individuals not typically disposed to working together: clinicians and business leaders; clinicians and payers; providers and suppliers; providers and other providers, even suppliers and their competitors, or more likely, a combination of a variety of these groups.

To be successful, leaders need to see their role as transforming, as compared to reforming, healthcare. It’s not as much about who pays for healthcare – although that is certainly important – but rather about lowering the cost while increasing quality, and that will require significant changes in the delivery model and the relationship between historically disjointed players. For the most part, those in healthcare, recognize the potential for accountable care organizations (ACOs), patient-centered medical homes, and bundled payments, among other initiatives to increase coordination and as a result performance across the continuum of care. Unfortunately, few, if any, know what will prove to be the best model(s), let alone how we create those models. An ACO, for example, could take on a number of forms and players: hospital(s) and employed physicians; healthcare systems and payers; multi-specialty physicians practices; or groups of unaffiliated provider organizations, among others. When organizations and individuals involved in these new models do not share the same ownership structure, the legal issues are not insignificant. Even greater are the challenges aligning people and processes, not to mention technology.

I’m curious. Is your organization making any changes in executive development or recruiting to best prepare for the changes healthcare reform holds in store?

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Karen Conway

Vice President, Healthcare Value