Perspectives

The millennial workforce: How can hospital CEOs keep up?

Health Care Current | October 31, 2017

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory, and legislative changes.

My Take

The millennial workforce: How can hospital CEOs keep up?

By Steve Burrill, Vice Chairman, US Health Care Providers Leader, Deloitte LLP

I have five children ranging in age from nine to 26 years old. They each engage differently with me, with school or work, and with each other. They all have different priorities, and different motivations. My eldest son fits the broad definition of a millennial. He cares about his work, he wants to do well, and he expects that hard work will allow him to advance. But his life revolves around his friends, his personal time, and doing what must be done to support it. His motivation for earning money is to make his free time more enjoyable. That, for example, might mean buying a new surfboard.

At Deloitte, we use something called “Business Chemistry” to help define people’s characteristics, working style, and relationship preferences. Regardless of age, the four profiles – Pioneer, Driver, Guardian or Integrator – help us understand how to improve collaboration among workers and increase the effectiveness of their interactions. In terms of Business Chemistry, my eldest son is a Guardian – as are about 30 percent of people in his generation, according to our research. Like other millennials, he’s a “secret introvert.” He is a hard worker, focused and practical, but not a risk taker.

Tapping into the millennial workforce in health care
Health care professionals are in short supply and many CEOs are concerned about their ability to find physicians, nurses, technicians, and other talent. Of the 20 hospital and health system CEOs we recently surveyed, 14 said finding talent was a major issue. That aligns with a similar research we conducted in 2015.

These leaders recognize that their businesses are changing and that they will need the right talent – now and in the future – to keep pace with the dynamic marketplace in which they operate. Whether they are patients, the parents of patients, or employees, health system CEOs want to know how to work most effectively with people born between 1987 and 2000 – the millennials.

Business Chemistry uses analytics to reveal how each person aligns with four scientifically based patterns of behavior: Pioneers, Drivers, Guardians, and Integrators. Knowing which traits emerge more strongly in which people can help drive more rewarding collaboration among people, within teams – and now – even between generations.

  • Pioneer: More than anything, a Pioneer can be recognized by their spontaneity and penchant for brainstorming. Often the most extroverted of the four groups, Pioneers are energetic and expressive, and have broad networks and collaborative styles. They adapt easily to change and like to jump in and lead the charge toward new horizons. Pioneer motto: Have fun. It’s just work.
  • Driver: The most defining characteristic of Drivers is their technical and quantitative orientation. This could take the form of an expertise in math, engineering, mechanics, technology, or even music. The Driver type has direct style, a logical approach, a competitive streak, and a willingness to make tough decisions. Drivers are likely to take charge and enjoy experimentation. They tend to prioritize goals over relationships. Driver motto: And your point is…?
  • Guardian: Methodical. That is the dominant characteristic of the Guardian. They are also structured, meticulous, focused on the details, and practical. If you’re paying attention to these things, a Guardian is easy to spot. But they are also reserved, and don’t always make themselves known. Guardians are likely to be conventional, hierarchical, disciplined, and frugal. They also are likely to speak slowly or, often the most introverted of the four types, not at all, especially if others are dominating the conversation or fighting for the floor. Guardian motto: Changing the world, one spreadsheet at a time.
  • Integrator: A tendency to avoid confrontation and seek consensus is the Integrator’s strongest trait. They are empathetic and have a high tolerance for ambiguity. Integrators are connectors. They connect with people (and connect ideas), emphasize relationships, and strive to be helpful. Their way of thinking is nonlinear, big-picture, and contextual. They are traditional, trusting, and dutiful. Integrator motto: Consensus rules!

Millennials are often data-driven, goal focused
In a series of online studies, Deloitte researchers found that 60 percent of millennials fall into two Business Chemistry categories: Guardians (32 percent) and Drivers (27 percent). Because the Integrator type is diplomatic and people-focused, we were surprised to see that just 23 percent of respondents fell into that category.

Surveyed health system CEOs say that managing talent, especially the millennial generation, requires acknowledging and addressing different priorities. In some ways, this group can be easier to engage. That typically goes for all employees, from nurses, to administrative staff, to custodial workers.

Millennial physicians, for example, typically consider themselves to be more data-driven than their older counterparts, and 62 percent cite their reliance on EHRs as important in providing quality patient care.1 Unlike their older colleagues, millennial physicians tend to prioritize work-life balance: 92 percent of surveyed millennial doctors say that it is important for them to strike a balance between work, personal life, and family responsibilities.2 In an environment that often requires long hours and being on call, many CEOs are still learning how to meet these expectations.

I am a baby boomer. As a generation, we are often hard charging and motivated to a fault. Boomers made sure they created something significant for themselves, but it was often at the expense of their friends and families. I had to learn how to take a real vacation…and that took a while. Millennials are not all one thing, but do possess unique attributes. As hospital leaders prepare for the future, they should develop strategies that align with the expectations and work styles of rising generations. To help these employees reach their potential, hospital and health system CEOs should understand what motivates them.

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1 Robert Nagler Miller, “Millennial physicians sound off on state of medicine today,” AMA Wire, March 2017.
2 Ibid.

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In the news

Court lets CSR nonpayment stand; Republicans propose restoring funding for two years

Despite a legal challenge from Democratic attorneys general in 18 states and the District of Columbia, a federal US District Court judge ruled that ceasing cost-sharing reduction (CSR) payments to health plans would not cause “irreparable harm,” and let the administration’s recent policy change stand.

After the administration announced it would no longer pay health plans for reducing cost sharing for low-income people who purchase coverage through public insurance exchanges, 18 attorneys general from Democratic states requested a temporary restraining order to force the administration to continue the payments (see the October 24, 2017 Health Care Current). However, the judge rejected their argument that the move would cause harm, noting that many health plans had increased premiums to prepare for such a move from the administration.

Related: Hatch and Brady propose restoring CSR payments
Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Kevin Brady (R-Texas) released a bicameral Republican agreement to change some policies in the Affordable Care Act (ACA) and extend the CSR payments through 2019. While a bill is forthcoming, the announcement said that the legislation would:

  • Fund CSR payments through 2019. Plans must meet certain requirements to be eligible for these payments, such as not covering abortions. For 2018, the legislation would charge the US Departments of Treasury and Health and Human Services (HHS) with coming up with policies to prevent health plans from being paid both through higher premiums and the CSR payments. 
  • Repeal the individual mandate from 2017-2021 
  • Expand health savings accounts by increasing the maximum amount people can contribute
  • Retroactively exempt employers from any penalties for not providing employees with coverage from 2015-2017

Bipartisan health care deal receives praise from health groups, governors

Eight health care associations, including the Blue Cross Blue Shield Association, the American Medical Association, and America’s Health Insurance Plans, signed a statement supporting legislation developed by Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the Bipartisan Health Care Stabilization Act of 2017. The groups supported the bill’s funding of CSR payments for two years (see the October 24 Health Care Current), noting the value of helping lower-income Americans afford care.

Additionally, 10 Republican and Democratic governors authored a letter to Congress urging a vote on the Alexander-Murray bill. They asked Congress to fund CSR payments through 2019.

The future of the bill is unclear without Republican leaders’ support. Alexander released a statement urging Congress to act, noting the bill’s support from Republican and Democratic senators.

Related: CBO score of Alexander, Murray bill
In its cost estimate of the Bipartisan Health Care Stabilization Act, the Congressional Budget Office (CBO) said that the legislation would reduce the federal deficit by $3.8 billion over a 10-year period. CBO said that the legislation would not substantially change the number of people with health insurance coverage. The projected savings would come from rebates from health plans to the government for the funding of CSRs for two years and from higher use of lower-cost “copper-tier” plans, which could attract younger people to the market. If more young people purchase plans, insurers could lower premiums and generate federal savings from reduced government subsidy funding.

Congress, administration review policies to combat opioid abuse

At an October 25 hearing, witnesses informed the House Energy and Commerce Committee about federal government efforts to combat the opioid epidemic. They called for coverage of medication-assisted treatments, researcher access to illicit drugs, and continued targeting of physician prescribing behavior, in line with new prescribing guidance from the US Centers for Disease Control and Prevention (CDC).

Witnesses included:

  • Scott Gottlieb, MD, Commissioner, Food and Drug Administration (FDA) 
  • Elinore McCance-Katz, MD, PhD, Assistant Secretary for Mental Health and Substance Use, Substance Abuse and Mental Health Services Administration (SAMHSA)
  • Anne Schuchat, MD (RADM, USPHS), Principal Deputy Director, CDC 
  • Nora Volkow, MD, Director, National Institute on Drug Abuse, National Institutes of Health 
  • Neil Doherty, Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration

The Chairman and other members of the panel said that they had not received complete documents related to the Committee’s investigation of “pill dumping” in West Virginia towns, months after bipartisan requests for them.

Related: The administration officially issued a public health emergency declaration for the opioid crisis. The declaration authorizes:

  1. Patients in remote areas to use telemedicine services to access treatment, and for physicians to write prescriptions remotely
  2. Displaced Worker Grants to individuals suffering from opioid addictions and those unable to find employment due to addiction
  3. HHS to expedite its hiring for positions to help with the crisis
  4. Funding to be redirected from HIV/AIDS programs to address opioid abuse

The administration’s Commission on Combating Drug Addiction and the Opioid Crisis is set to release its recommendations on November 1. The declaration does not contain any new federal funding. It also does not change the Institutions for Mental Disease (IMD) exclusion, which some recommend to broaden Medicaid funding for treatment, or change privacy laws.

Background: The Medicaid and CHIP Payment Advisory Commission (MACPAC) held a public hearing on October 26 titled, “Medicaid and opioid use disorders: Update on MACPAC work and federal developments.” MACPAC staff highlighted HHS’s Five-Point Opioid Strategy and a state opioid workshop sponsored by the Substance Abuse and Mental Health Services Agency (SAMHSA), the US Centers for Medicare and Medicaid Services (CMS), and the CDC. The Commission noted that the CMS Medicaid Innovation Accelerator Program (IAP), which provides technical assistance to states, has also been working with states on the opioid crisis.

The Commissioners agreed on the need for research in several areas:

  • Integration of behavioral health and physical health services
  • Prevention costs
  • Presence and cost of other diseases that are showing up due to the use of injectable heroin and other drugs
  • The cost of caring for patients in IMDs relative to inpatient treatment elsewhere in the system. 

The Commission will be holding an expert roundtable in November on privacy regulations for substance use disorder treatment. It will use this roundtable to identify whether MACPAC should recommend changes to current laws.

Amid ACA uncertainty, more people are uninsured

More Americans went without health insurance during the third quarter of 2017, according to new data from Gallup. The uninsured rate during the third quarter was 12.3 percent, an increase of 0.6 percentage points from the previous quarter and the highest uninsured rate since the fourth quarter of 2014. The uninsured rate peaked at 18 percent in quarter three of 2013.

The uninsured rate increased the most for people with the lowest incomes: it increased by 1.7 percentage points among those with a household income of $36,000 or less per year.

Gallup attributed the increase to uncertainty and other developments in the individual market. Some health plans have stopped offering coverage through exchanges, resulting in less competition. This and regulatory uncertainty have led to higher premiums. Instability, higher premiums, and regulatory uncertainty might cause some consumers not to purchase insurance.

Gallup predicts that unless the federal government acts to stabilize the individual market, the number of Americans without insurance will likely continue to increase.

House to vote on CHIP reauthorization

House Majority Leader Kevin McCarthy’s (R-Calif.) said the House would vote on the Children’s Health Insurance Program (CHIP) reauthorization the week of October 30. The scheduled vote comes despite a lack of agreement between Republicans and Democrats on funding sources. McCarthy said the House would vote on the bill because some states are running out of program funding. The CHIP reauthorization bill passed the Energy and Commerce Committee along partisan lines (see the October 10, 2017 Health Care Current).

Related: The CBO estimates that a House bill to extend funding for CHIP would reduce the federal deficit by $1.1 billion, according to a report released October 19. The House CHIP bill would extend the program for five years, and pay for the program with funds from the Preventative Services Fund. The funding must outweigh the cost of providing funding to the states for the program.

On October 26, MACPAC agreed to send a warning to Congress about the consequences of not funding CHIP, even if some states have residual funding.

Iowa and Massachusetts Medicaid waivers falter

On October 23, CMS announced it would not approve Massachusetts’s 1332 waiver request, which would have established a premium stabilization fund in the state (see the October 10, 2017 Health Care Current). CMS said it made the decision because the waiver was submitted too late for plan-year 2018. Massachusetts submitted its application on September 8, and asked CMS to approve it by November 1, the day open enrollment begins. However, the 60-day public comment period would not end until after November 1.

1332 waivers allow states to ‘waive’ provisions of the ACA to provide coverage in innovative ways as long as they meet certain guardrails.

Sen. Alexander, chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, said the bill he proposed with Sen. Murray might have allowed for the waiver to be approved. If passed, the Murray-Alexander bill would reduce the standard waiver approval process to 90 days and establish a 45-day process for urgent matters.

Also on October 23, Iowa Insurance Commissioner Doug Ommen announced that the state would withdraw its request for a 1332 waiver, saying that the ACA was too inflexible for the reforms they were seeking. The state had requested a waiver to allow for one standard plan, through Wellmark Blue Cross and Blue Shield, available to all consumers through the exchange. The waiver would have also established a reinsurance program and age- and income-based premium credits.

Maryland consumers can compare hospital prices for the first time

Maryland recently launched a website that allows consumers to compare the price and quality of certain procedures among hospitals in the state. Hosted by the state Health Care Commission, WearTheCost.org can help consumers, especially those with high deductibles, make informed decisions about where to receive care.

The site contains data for four common procedures: hip replacement, knee replacement, hysterectomy, and vaginal delivery of a baby. The Commission will add more procedures over the next year. In addition to showing prices for these procedures, it breaks them down into inpatient care, outpatient care, professional services, prescription costs, and potentially avoidable complications.

There is some skepticism that posting prices online will reduce health care spending. Studies published by Health Affairs have demonstrated that, despite the increased availability of price data and greater exposure to out-of-pocket expenses, few patients seek out price information or use available price transparency tools (see the August 15, 2017 Health Care Current).

Breaking Boundaries

Employers pay for employees’ travel to encourage less expensive, high-quality procedures

A group of employers, frustrated with increasing hospital costs and the variation in costs with little correlation with quality, is steering employees to high quality-health care providers in other geographic locations. To encourage employees to seek out these providers, the employers are paying for travel for their workers seeking surgery and, in many cases, family members who help support the patient immediately after the procedure.

Employers have long explored innovative solutions to providing health care. Developing wellness programs and contracting directly with providers are a few strategies many have used in seeking better health outcomes for lower costs.

California’s Santa Barbara County, which has about 4,000 workers, is touting a savings of nearly 50 percent for four surgery cases that have taken place since it started its voluntary “out-of-town program.” The county paid $61,600 for a spinal fusion surgery at a San Diego area hospital. This surgery would have cost more than twice as much if it had taken place in Santa Barbara. The county also says it avoided two other costly operations after patients traveled to get a second opinion. In addition to paying for the surgery and travel costs, some employers experimenting with this model are waiving copayments and deductibles, and still coming out ahead.

The typical model uses bundled payments, where the employer pays a set price for all the tests, services, and fees associated with a procedure. If complications arise, the provider bears the financial risk. Santa Barbara County is one of hundreds of employers in the western part of the US working with Carrum Health, a start-up that negotiates bundled prices and chooses surgeons based on complications and readmission data. The start-up has also worked with hospitals in the San Francisco and Seattle areas. Health Design Plus is another company that assists employers, insurers, and patients with the logistics of shopping for surgery outside their geographic area.

Analysis: Deloitte’s recent paper on bundled payments, Navigating bundled payments: Strategies to reduce costs and improve health care, discusses strategies health care stakeholders are using to improve quality and health outcomes. Providers that participate in bundled-payment programs tend to be highly motivated to achieve improved health outcomes and reduce unnecessary costs. Successful strategies identified in the paper include:

  • Investing in care coordinators to track, and periodically contact, patients after hospital discharge to assist with medication reconciliation, educate them on symptoms to monitor, and encourage follow-up with their physicians;
  • Hiring less-expensive staff, and not relying only on nurses to help patients and to meet care coordination goals;
  • Striving for prompt scheduling with community physicians and outpatient rehabilitation services to improve outcomes, and relying on pharmacists to support medication reconciliation and underscore the necessity for adherence;
  • Using analytics to identify patients with the constellation of comorbidities and other health and support issues that put them at the greatest risk for readmissions.

Alternative payment models (APMs) such as bundled payments in health care are becoming more prevalent, as health care stakeholders are interested in strategies that use incentives to achieve better value. And innovations such as telehealth and remote monitoring are making it so geography is becoming less important for certain services. Legislation including the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is encouraging more health care organizations to participate in APMs and take on more risk.

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