Face to Face
The Futurist
A conversation with Minnesota’s chief hospital executive.
Interview conducted by Carmen Peota
A decade ago, when he was CEO of Rice Memorial Hospital in Willmar, Lawrence Massa helped the leaders of that city-owned facility envision what health care might look like in the future so that they could build a new campus in a way that would meet the coming needs. Today, with that project long behind him, Massa is still focused on the future. And as president of the Minnesota Hospital Association, he’s trying to help all hospitals in the state look ahead so that they not only can meet the needs of the communities they serve but also survive in a changing health care environment.
With a tough economy, cuts in publicly funded health care programs, competition in the marketplace, and nearly everyone—from insurers to legislators—pointing to hospitals when they talk about cutting costs, the times are challenging for hospitals. So we thought it would be interesting to hear how our state’s leading hospital executive envisions the future for his organization’s members. We asked him to share some of his perspectives. Here’s part of that conversation.
Q: It seems to me that hospitals are in a state of flux? Do you agree?
I absolutely do. I think we’re in a transitional state right now. There’s growing recognition throughout health care that we’ve got to change the care that we deliver to get better results and bend the cost curve and make it more affordable. And hospitals have to be part of it.
Q: What are some of the forces driving these changes?
The national debt crisis and federal health care reform legislation have coalesced a lot of ideas about how care delivery and reimbursement ought to change in the future. And, quite frankly, a workforce problem is looming. We’ve got a workforce made up of baby boomers who will be retiring in the next decade or so, and the cohort that will replace them is not as large. We’ve done a lot of work to encourage people to choose health care careers, but there aren’t going to be enough who do. All of those things are coming together and forcing a lot of us to change our thinking.
Q: What worries hospital executives the most?
Right now they are very focused on reimbursement. As part of our planning process, we interview our board members every year. For the last couple of years, they have been focused on federal health care reform. But this year, they were much more state-focused because of all of the angst that was created by the polarization at the Capitol. There were some significant cuts to health care providers and health plans. That’s keeping members on edge because many are operating on thin margins.
But there are other concerns: the federal deficit reduction discussions, implementing the federal health care reform act, and meeting the criteria for meaningful use of health information technology in order to access federal dollars. And we continue to see the impact of the declining economy on our members. Fewer patients are seeking care because they have high-deductible health plans, and we are seeing more uncompensated care because more people are losing their health care coverage altogether.
Q: What state legislative changes this year were particularly harmful for hospitals?
They delayed and repealed rebasing—a process under current law that’s supposed to take place every two years; it updates what the state pays hospitals to keep up with inflation. They haven’t done it for a number of years. They just keep delaying it. That costs members over a $100 million per biennium. Then they enacted a 10-percent across-the-board rate cut for the state’s fee-for-service program. They also cut what they pay the health plans for prepaid Medical Assistance. I’m sure that will cause the plans to want to negotiate lower payments with our members.
Q: Do those cuts have more of an impact on rural or urban hospitals?
It depends. There are urban hospitals that treat a higher number of state program participants. But that same thing can be said of hospitals in rural areas. Bemidji, for example, has a large number of public program participants. The poorer counties will feel the impact of this. The offset to all of that, however, is that early Medicaid enrollment stays in place. That will salvage coverage for about 105,000 Minnesotans who otherwise would have lost it.
Q: How do hospitals feel about the constant talk of lowering health care costs? Don’t many cost-cutting efforts actually hurt their bottom lines?
Yes. You know the old adage, when asked why he robbed banks, Willie Sutton said, “That’s where the money is.” Hospitals are in that same position in the health care delivery system. They’re very large, they account for over a third of overall health care costs, and there are not that many of them. So it’s easy to focus on hospitals. Our message has been that we need to change the payment system to reward value. Across-the-board cuts to fee-for-service—just paying providers less—may not be the best approach.
Q: The membership of your organization includes more than just hospitals, as many hospitals are now part of health systems that also include clinics and other types of providers. Might there be a name change in its future?
We talk about that all the time. We believe we have brand recognition now. But the fact of matter is, most of our members are not just hospitals; many are integrated delivery systems. At this point, we feel comfortable with our name because all of those systems have a hospital. That’s the one common denominator. But you’re right, our name is a bit one-dimensional in a world that’s multidimensional.
Q: How have hospitals’ relationships with physicians changed during your career?
More hospital boards today have physician representation. Twenty-five years ago, that was more of a rarity. I think there’s much more collaboration between physicians and hospitals. There’s more of an understanding that we all have the same goals. And there’s been tremendous growth in physician leadership. A lot of our hospitals have paid medical staff and physicians in administrative roles. That was very unusual 25 years ago.
Q: Do you have ideas about how the hospital association can work with organized medicine?
We have actually had joint meetings between our executive committee and the MMA’s executive committee during the last year and a half. We’re trying to identify issues where we’re aligned and communicate about areas where we might differ. I think that dialogue has been helpful. The MMA has been our partner on the Minnesota Alliance for Patient Safety. We’ve also created a physician leadership counsel within our organization, not to compete with the MMA but to get physicians to share their thoughts with our board so that we can have more of a physician perspective when making decisions. They expressed that we needed to work on readmissions and that we should not go it alone. They’ve also encouraged us to work on the mental health safety net, so that when people show up in ERs, there are appropriate places where they can go.
Q: What do you envision for hospitals in Minnesota in 10 years?
I think health care will be more integrated than it is today. We may have about the same number of hospital beds or fewer. A lot will be determined by how successful we are at keeping people healthy so that they don’t need to use the hospital as much and our success in improving the quality of the care we provide so that people won’t need to be readmitted. People who are going to the hospital 10 to 20 years from now will be very sick—extremely sick.
I think the role of all health care workers will continue to change—that we’ll continue to move toward more team-based care. I see more reliance on advanced practice nurses as primary care providers, complementing physicians.
Much more care will be delivered in the home, and that may be done by hospital-based organizations. I think our members are beginning to believe that in the future they’ll be relying less on inpatient beds and more on outpatient services.
Q: This must be a difficult time for hospital leaders. Is it hard for them to know where to invest dollars and energy?
It is very difficult because, as I said, we’re in this transitional phase. We’re still paid on a fee-for-service basis. So reducing utilization hurts a hospital’s financial performance. We’re moving to a system in which we’re going to be paid for bundles of care or receive global payments with ACO-type organizations, so there will be an incentive to provide only the care that is necessary for the patient. But when you’re kind of in-between, it’s very, very difficult to make long-term decisions or even short-term ones. But our members are doing it. MM
Carmen Peota is managing editor of Minnesota Medicine.