Trends in Healthcare & Governance

HTNYS’ monthly Trends updates provide trustees with information about emerging developments in governance and healthcare. Published by HTNYS on the second Wednesday of each month, Trends’ timely statistics and insights help trustees fulfill their roles and responsibilities while adapting to the changing environment.

Analyses highlight immense value of hospitals and health systems to their communities
June 2022

We know that all hospitals, regardless of ownership type, size and location, provide a comprehensive range of benefits and essential services to their communities. To be able to speak on behalf of their hospitals and be advocates, trustees should be well versed in the economic and community benefit impact their hospital or health system has on their communities.

HANYS released our economic and community benefit analyses for 2022 earlier this year, which trustees may use to understand the tremendous impact of hospitals across the state. Trustees can browse our statewide, regional, legislative and hospital- and system-specific reports to see how New York’s hospitals and health systems significantly impact their local economies and communities.

The reports also include a Statewide Financial Challenges section to highlight the extraordinary impact of the pandemic, given that the data for these reports are primarily from 2020.

Key fiscal data points include:

  • Hospitals statewide reported a -1.4% average hospital operating margin (compared to 5.5% nationally in 2020).
  • Collectively, New York’s hospitals reported the narrowest average operating margin in the country in 2020.
  • Forty-nine percent of New York’s hospitals reported negative operating margins in 2020 (83% if federal Provider Relief Funds and state supportive funding are not considered).
  • Fifty-five percent of New York’s hospitals reported fair or poor financial condition in 2020 (70% if federal Provider Relief Funds and state supportive funding are not considered).
  • Collectively, New York’s hospitals reported the seventh-worst commercial insurance reimbursement rate in the country.

For each dollar of care provided in New York, Medicare pays 89 cents and Medicaid pays 61 cents. The value of public reimbursement levels has declined from previous years mainly from the increase in costs required to appropriately staff and deliver care.

Despite these significant challenges, HANYS’ analyses highlight that New York’s hospitals continue to be a major driver of economic activity throughout the state. New York’s hospitals were responsible for $188 billion in economic activity — 10.6% of the state GDP — and generated 867,000 jobs across New York’s economy in 2020.

To further highlight the value of hospitals to the public, policymakers and press, the American Hospital Association recently released two reports that trustees may use to build their knowledge:

Hospitals are encouraged to publicly share the many ways they support their communities. You can find further resources on the AHA community benefit webpage and on the Seizing the Conversation webpage.

Now, more than ever, we must support our healthcare providers — the health of New York’s people and economy depend on them. And trustees can help be a voice. Information for this article was obtained from HANYS and the AHA.

A case study in healthcare disruption; Strategic questions for boards to consider
May 2022

The massive wave of investment and innovation in healthcare that began before the pandemic continues. New market entrants come from the technology, telecom and consumer industries.

  • In 2021 alone, $44 billion was raised globally in health innovation — twice as much as 2020 — and the acquisition of health and health tech companies rose 50%.*
  • Over the next five years, up to 80% of healthcare providers in the U.S. plan to invest in technologies including digital health, artificial intelligence, machine learning, and tools to support clinical staff and caregivers.*

Healthcare trustees shape the future of their organizations and therefore need to understand the strategic threats posed by market disruptors. As an example, CVS Health leaders recently provided an update about how they are executing their growth strategy and forging stronger consumer ties:

  • The company plans to spend $3 billion on digital enhancements to improve the consumer experience at its locations.
  • CVS Health’s CarePass program, a paid membership that offers free delivery of eligible prescriptions from its pharmacies and other perks, now has 5.6 million subscribers, a 40% jump from last year.
  • Nearly 80% of patients use CVS’ self-service digital tool to complete necessary forms ahead of their appointments at its HealthHUB and MinuteClinic facilities.

CVS Health is now the second-largest healthcare company in the world, with a $141 billion market cap. Aside from its pharmacies and walk-in clinics, CVS also is a pharmacy benefits manager and a health insurance company. The company has built dozens of strategic business partnerships in recent years, invested in startups and acquired companies to complement its core offerings. It also launched a $100 million venture fund targeting early-stage health tech companies.

The American Hospital Association provided a summary of CVS’ healthcare strategies in its latest Market Scan. CVS’ three key growth strategies are pertinent to health system leaders looking at their own digital plans, whether you plan to build, buy or partner with a player like CVS:

  • Care coordination and chronic disease management: CVS is rapidly expanding its capabilities through partnerships and investments in disease management startups and social factors of health solutions.
  • Health IT: This increasingly has become an area of interest for CVS Health through its venture capital arm.
  • Home health: CVS has been increasing its presence in home health, as have its competitors Amazon, Walmart and Walgreens, with CVS’ key moves involving clinically complex patients and in-home cancer care.

CVS is one massive disruptor among other major retail pharmacy chains, payers, technology companies and other, smaller and local organizations. Hospitals and health systems should view disruption as an opportunity to work with healthcare disruptors, if appropriate, by sharing their healthcare knowledge and expertise. Some questions that healthcare trustees should consider:

  • How are we keeping our organization relevant, necessary and innovative?
  • How can we proactively address these disruptive trends?
  • What are we doing to be a “disruptor” in healthcare?
  • Are we partnering with any disruptors now or within the next five years?
  • Do we have board members who have experience with technology and/or digital disruption?
  • Does our board have the skills needed to assess the opportunities to partner with disruptors?

Trustees should understand that maintaining the status quo isn’t going to work and staying on top of current healthcare trends and the strategies of the disruptors is a must.

Information for this article was obtained from the AHA’s “3 Keys to CVS Health’s Growth Strategy.
*Data reported by the World Economic Forum.

Board support is essential for behavioral health access
April 2022

Hospital and health system trustees play an important role in helping develop strategies to improve access to behavioral healthcare in their communities. To succeed, trustees need a good understanding of the behavioral health challenges and needs in their communities. 

The need for behavioral health services has increased since the pandemic started. The CDC recently released an analysis of the mental health of U.S. high school students during the pandemic.  According to the new data:

  • in 2021, more than one-third (37%) of high school students reported they experienced poor mental health during the COVID-19 pandemic; and
  • forty-four percent reported they persistently felt sad or hopeless during the past year.

The new analysis also describes some of the severe challenges youth have encountered during the pandemic:

  • more than half (55%) reported they experienced emotional abuse by a parent or other adult in the home, including swearing at, insulting or putting down the student;
  • eleven percent experienced physical abuse by a parent or other adult in the home, including hitting, beating, kicking or physically hurting the student; and
  • more than a quarter (29%) reported a parent or other adult in their home lost a job.

While these data may be alarming, the CDC analysis demonstrates the need to ensure access to behavioral health services and can inform the design of effective programs. But unfortunately, gaining access to behavioral healthcare remains difficult due to the shortage of providers, stigma, lack of a connected continuum of care and other obstacles.

Given the critical importance of addressing these issues, HANYS has prioritized working with and assisting our members as they navigate the complexities of the behavioral health environment. HANYS’ website offers blogs, recorded webinars and other resources. Trustees are encouraged to take advantage of these resources, including HANYS’ blog post highlighting the sharp rise in children experiencing behavioral health crises, challenges hospitals face in responding to this crisis, and recommendations.

The American Hospital Association’s Executive Summary: Regional Networks — Improving access to behavioral health services provides an overview of common characteristics of current and emerging regional behavioral health networks across the nation and offers insights for communities interested in improving access to behavioral health services through community partnerships. The series of hospital/health system case studies details how creative collaborative solutions can reduce fragmented care, improve outcomes and deliver positive returns on investment in a variety of ways.

  • A key element identified for building and maintaining a successful regional behavioral health network is health system/hospital CEO and governing body commitment to network formation and oversight.

As stewards of their communities, improving access to behavioral health and mental health services should be a priority for hospital and health system boards.  Although not the sole solution, regional networks of care could be one way to help address the behavioral health crisis. 

Information for this article was obtained from the American Hospital Association’s Executive Summary: Regional Networks - Improving access to behavioral health services and the CDC’s website.

Boards can self-assess readiness for advancing diversity and equity
March 2022

Addressing health equity and diversity

As leaders of anchor organizations in their communities, healthcare trustees recognize their duty to identify root causes of health inequities and bring about systemic change.

For some boards, having these discussions may be uncomfortable. Some members of the board will have less experience, education and training on health equity than others. Before trustees can embark on advancing health equity, they should take stock of where they are as a group in being ready for these conversations.

For this reason, Via Healthcare Consulting, Inc. and Impact4Health, LLC developed a survey on board readiness to respond to health equity. The self-assessment survey can also help foster candid conversations about the growing concerns over health inequities.

The survey contains 20 different statements that reflect different best practices that can inform improved governance to address the longstanding negative impact of systemic bias in healthcare.

Four key areas of focus when assessing readiness to advance health equity

  • Establish a board culture that values diversity, inclusive leadership and health equity.
  • Create board accountability for health equity.
  • Review key metrics on health equity to inform the board.
  • Develop the board’s inclusive community engagement.

Self-assessment is the starting point for the conversation

Follow-up steps include:

  • Collect survey responses from all board members and have the results collated to show averages as well as frequency of responses.
  • Hold a special session to discuss the results of the health equity readiness board self-assessment.
  • Prioritize and focus on two to three areas.
  • Develop an action plan to address the focus areas.
  • Include a review of progress on the action plan as a regular agenda item at board meetings.

Achieving equitable care is an ongoing journey

The scores themselves are less important than the thought-provoking and educational process the self-assessment is designed to generate. Achieving equitable care is an ongoing journey. Trustees must continuously assess their board’s readiness and their organization’s performance on health equity, and seek learning opportunities for improvement.

For more details, read AHA Trustee Services’ article, Board Diversity Survey to Advance Health Equity.

The state of trustworthiness
February 2022

Trust has been a widely discussed issue since the pandemic began. Public disputes, misinformation and conflicting messages about the coronavirus and vaccination have led to questions about what, and who, can be trusted. Trust is crucial for hospitals and health systems as community anchors dedicated to achieving health equity. Healthcare organizations and their governing board members should now focus on how to maintain and grow trust with their patients and communities.

Principles of trustworthiness

In May 2021, the AAMC Center for Health Justice published Principles of Trustworthiness, a set of guidelines and actions for healthcare and other organizations to use to show they are worthy of their community’s trust. AAMC produced a toolkit of materials that can be used to facilitate discussions within communities, develop relationships with a broad coalition and track lessons learned.

In September 2021, AAMC polled a nationally representative sample of adults to gauge the following:

Their level of trust in institutions

  • Most people polled overwhelmingly trusted their neighborhood fire departments (84%), businesses (81%), pharmacies (80%) and hospitals (79%) to treat all people fairly.

How that trust has changed over the course of the pandemic

  • The largest differences were by income. Those whose income was smallest reported greater net losses in trust.
  • Net trust across all sectors for Millennials, Gen X, and Baby Boomers overwhelmingly increased. For Gen Z, however, net trust across all sectors decreased.

What institutions should do to be seen as trustworthy partners by their communities

  • Since fire departments were the most trusted sector in every age and racial and ethnic group and across all incomes and U.S. geographic regions, this suggests that they may be a unique partner for organizations to consider to bring needed change to their communities’ health.
  • Some respondents said that institutions should:
    • Be persistent and consistent and live up to stated goals.
    • Don’t overpromise or distort things to gain acceptance. Be honest even if it’s less favorable to your agency or self.
    • Have more positive interactions at times when there is not an emergency.

In sum, healthcare trustees play an essential role in building trust as they represent their hospital in their communities. This includes defending the hospital when it’s under pressure and developing partnerships with other healthcare providers and community organizations. The quality of these relationships and the smoothness of their interaction directly contribute to the overall effectiveness of the healthcare organization.

Note: Information on this topic was obtained from AAMC’s The State of Trustworthiness.

Make cybersecurity a priority
January 2022

Healthcare is unique among economic sectors in its breadth and depth of valuable data and information, making it a lucrative target for cyber thieves. Hospital executives and boards need to be proactive and pay even more attention to cybersecurity threats than those in other sectors of the economy.

Did you know?

  • More than 93% of healthcare organizations in the U.S. have experienced a data breach since the third quarter of 2016 and 57% have had more than five data breaches during the same timeframe.
  • While 91% of hospital administrators consider the security of data a top focus, 62% feel inadequately trained or unprepared to mitigate cyber risks that may impact their hospital.
  • According to the HIPAA Journal, healthcare email fraud attacks have increased 473% in the last two years.
  • There were 38 million healthcare sector records exposed in 2019, versus 7 million healthcare sector records exposed in 2018.
  • In 2019, the healthcare industry incurred an average cost of $6.35 million per breach. It is estimated that the cost of data breaches will rise from $3 trillion each year to over $5 trillion by 2024.

Governing boards have a critical role to play in terms of understanding and curtailing cybersecurity risks.

Boards should:

  • Understand that cyber risk is first and foremost a patient safety and care delivery risk issue.
  • Know that healthcare is a prime target for cyber adversaries; the threat is ongoing and constantly changing.
  • Keep cybersecurity front and center; receive regular updates on risk and risk mitigation. Treat it as an enterprise risk issue.
  • Understand that cyber risk can never be eliminated; it can only be mitigated. Proper planning can make cyberattacks less probable and less severe if they do occur.
  • Uncover the vulnerabilities within the organization and take steps to mitigate that risk.

Five questions board members should ask to ensure cybersecurity is being addressed internally:

  • Do we have at least one person on staff dedicated full time to information security?
  • Is the reporting structure of information security officers sufficiently prominent within the organization to provide sufficient status, authority and independence for effective functioning?
  • Does the board have a risk committee and is that committee briefed regularly on evolving cybersecurity risks?
  • Do we have an incident response plan that includes contingencies for various cyber scenarios, such as ransomware, and how secure are our backups?
  • Does the board receive regular briefings and updates on the strategic cyber risk profile, and on how risks are being mitigated?

Looking for cybersecurity resources?

HHS recently launched a new website, “Aligning Health Care Industry Security Approaches.” The new 405(d) program website is presented as a useful place for organizations looking for additional “resources, products and tools that help raise awareness and provide vetted cybersecurity practices.”

Note: Information on this topic was obtained from AHA Trustee Services (for AHA members only) and HHS’ Aligning Health Care Industry Security Approaches.

2021 Trends

2020 Trends

2019 Trends

2018 Trends