What Do the Hospital “Cs” Think About? The 13 Ps! Part 1

Every day sales reps descend on hospitals with an intense desire to get to the coveted “C” suite. They want access to the carpeted area of the facility because that is where the executive team resides. In the language of business, C-suite players are the individuals who are responsible for effective financial and human resource management. This includes making the final decision on the acquisition of product’s, services or integrated solutions that support key financial and clinical initiatives either alone or in conjunction with the governing board.

To get an appointment with this coveted group, you must understand how they think about the issues faced on a daily basis. Each hospital/system has its own special needs, opportunities and challenges. The 13 Ps will provide some insight.

In Part one of this blog we will review people, physicians, patients, pay-4-performance, product and physical environment. In Part 2 (next week) we will focus on process, place, price, payers and payments, promotion, perception and population health.

1. People – Hospitals and healthcare facilities are a microcosm of American business. This means that skilled and unskilled labor is required to execute the mission. An optimal mix of structure and staffing ensures better patient outcomes and operational efficiency. This is an ongoing challenge since reimbursement is fixed and the patient census fluctuates constantly. Compounding the problem is that many highly skilled clinical and technical personnel will be retiring over next 10 years. Hospital C’s are accountable to a governing board if they are a not-for-profit hospital and to the facility owners if they are a for-profit hospital.

2. Physicians– Physicians are the circulatory system of a hospital. Once a patient is admitted, they orchestrate their physical requirements including, medications, clinical tests and specific procedures. Historically, physicians have been paid based on the volume of work performed and hospitals were reimbursed a fixed amount.

Under healthcare reform the Cs relationship with their physicians is critical to ensuring the appropriate balance of resources against the demand. C’s must work “collaboratively” with their physicians to successfully embrace the changes in health care delivery as we move from a system that rewards quantity of care to quality of care. In today’s milieu hospitals are acquiring many physician practices to better align patient care around joint incentives.

The “Cs” also have to ensure that their employed physicians stay current on the Physician Sunshine Act and are conforming to its rules and regulations. The law requires manufacturers to report payments and/or transfers of value to physicians or academic medical centers and teaching hospitals. Beginning September 30, 2014, the public will be able to view all cash, gifts, stock, ownership and profits given for travel expenses, consulting fees and gifts by specific industry.

3. Patients– Hospital C’s are accountable for attracting patients and reducing wait times in the Emergency Department (ED). Since over 50% of patients are admitted thru the ED, wait time is a critical measurement of efficiency. Many hospitals even post their ED wait times on their website and update them frequently. Providing safe, high quality and cost-effective care with excellent outcomes is also a priority for C-suite executives. By understanding the key drivers of the patient experience and ensuring excellent patient satisfaction they will ensure clinical and financial success.

4. Pay-4-Perfomance – Value Based Purchasing or Pay-for-Performance is a model that rewards physicians and healthcare facilities for meeting key performance criteria for quality and efficiency. The hospital “Cs” must continually reduce costs and mitigate any unintended consequences through an efficient care delivery model. The financial incentive to reduce hospital acquired infections (HAI), medication errors and patient re-admission’s provides the impetus for them to stay focused on the metrics.

5. Product – The economic product of a hospital or healthcare facility is patient care. It must be delivered efficiently and effectively. This requires highly trained and skilled personnel working together in a collaborative manner with appropriate technology. Recruitment and retention of key clinical and operational professionals along with the procurement of appropriate technology presents a constant challenge for C-Suite executives who are always looking for new ways to reduce costs while increasing value.

6. Physical Environment –Property, physical plant and equipment remain a constant juggling act by “C” suite executives. For example, is the facility aging? Are we up to current OSHA standards? Can we manage the current and future technology demands? Is it more cost effective to renovate or plan for new construction? These are just a few of the issues that the “Cs” grapple with constantly.