1. The Health Care Environment Now and in the Future

2. When asked what made him a great hockey player, Wayne Gretsky observed: “I skate to where the puck is going to be, not where it has been.” Hospitals anticipate changes, predict their impact and adapt appropriately.

3. Hospital and health system leaders are working to manage complex institutions and professional relationships in a time of multiple changes with great turbulence and limited resources.

5. The best outcome is achieved by thoughtful consideration and the recognition that good leadership beats good plans every time. Good hospital leadership requires a knowledge of:  the community  the clinical staff and  developing trends and issues

6. Trends and Issues 6 areas with an uncertain timeline or outcome 9 areas where trends are already underway

7. Major but Uncertain Trends 1. The election outcome. 2. Supreme Court decision that health reform is constitutional and Medicaid expansion is optional. 3. Insurer responses to Supreme Court decision. 4. Entitlement reform. 5. Balance of conflicting societal values. 6. Recalculating prospective payment.

8. Major But Uncertain Trends 1. The election outcome  Political conflict reflects a divided public.  Small numbers of elected officials can have major impact. 2. Outcome of the Supreme Court’s decision  Will Missouri expand the Medicaid program? 3. Insurer response to Supreme Court decision  How will insurers respond to insurance exchanges?

9. Major But Uncertain Trends 4. Entitlement reform  Federal spending is financed 60% by taxes and 40% by loans  Entitlements are 60% of total tax revenues 5. Balance of conflicting societal values 6. Recalculating perspective payment  More accurate information will lead to increases or decreases in PPS revenue

10. Trends Already Underway 1. State of the economy 2. Population changes 3. Slow workforce growth 4. Government debt 5. Consolidation 6. Increasing electronic information 7. Integration/coordination across silos 8. Increasing performance information 9. Increased financial risk shifting to providers

11. Trends Already Underway 1. State of the economy  Uncertain recovery  Spending cuts likely 2. Population changes: aging  More Medicare patients increases entitlement spending 3. Slow workforce growth  From 2% to 0.1% 4. Government debt:  The Catch 22s – Reducing taxes or cutting spending both increase the risk of recession – Low interest rates undermine financial market discipline

12. Trends Already Underway 5. Consolidation  Of both caregivers and institutions  Consolidations change both cultures 6.Increasing electronic information  What does “all health care is local” mean when patient information is digital? 7.Integration/coordination across silos  Coordination of care 8. Increasing performance information  Publicly visible and always dated 9.Increased financial risk shifting to providers

13. Final Thoughts Change is obvious – episodic, acute care provided in uncoordinated silos will be replaced by longitudinal, chronic care in a coordinated or integrated health system. While hospitals need to adapt to this change, episodic, acute care is not going to disappear. The challenge to hospitals is not to move from one paradigm to another; it is to be effective in both paradigms simultaneously.

14. Final Thoughts  Increases in financial risk faced by providers and practitioners and advances in “ bundled payments,” require hospitals to assess the scale necessary to prosper.  Scale includes geographic reach, scope and volume of services and internal staff capabilities.

15. Final Thoughts Change is the order of the day for all of the components in the health care system. Each hospital needs to determine if its board and staff have the entrepreneurial orientation necessary to rapidly adapt to a changing environment.

16. The Bottom Line The best outcome is achieved by thoughtful consideration and the recognition that good leadership beats good plans every time. Good hospital leadership requires a knowledge of: – the community – the clinical staff – developing trends and issues

17. Questions?