The Ever-Changing Forms of Authenticity in Healthcare Leadership

A Research Brief by Jeremy Jagers

The current political atmosphere has the potential to drastically change the entire healthcare infrastructure in the United States of America, and not necessarily in a positive way. With the proposed removal of the affordable care act, millions of Americans are in a position where their healthcare coverage may very well be voided, left responsible for the full priced out-of-pocket medical care and treatment costs that they may or may not be able to afford. nahse

The reactions of healthcare providers themselves have been somewhat of a mixed bag. According to David Burik, who has been the Managing Director and leader of Navigant Healthcare Consulting Division, stated during the National Association of Health Services Executives C-Suite Conference that over the past year "uncompensated care went down, and bad debt went up". So what exactly is uncompensated care? According to the American Hospital Association, "uncompensated care is an overall measure of hospital care provided for which no payment was received from the patient or insurer. It is the sum of a hospital's bad debt and the financial assistance it provides. Financial assistance includes care for which hospitals never expected to be reimbursed and care provided at a reduced cost for those in need." While this may appear to be sound in practice at first, according to a study published in the Journal of Health
Economics, "Cost Shifting is the term used to describe the practice of hospitals of raising prices to make up for shortfalls from less generous patients and third-party payers". The study goes on to mention reports sent to congress Prospective Payment Assessment Payment Commission (PROPAC) that "suggest that hospitals are incurring losses from Medicare and Medicaid, and that together with losses from uncompensated care, these are passed on to private payers in the form of higher charges. Complaints about generous payers having to cross-subsidize stingier payers within the hospital have even reached the popular press"

So how does an authentic leader address these types of problems? Kelly Green, a financial advisor, introduced the topic of "impact investing", which, according to her is going to help solve the issues facing the United State's Healthcare Infrastructure. During her presentation, Green described these types of investments as an "intersection of financial goals with economic fundamentals and returns, and impact goals". Green stated that "sustainable and impact investments have performed as well or better than their counterparts over a 20 year period", to reinforce the idea that a leader in healthcare can effectively align their own authentic goals and commitment to change, alongside of the day-to-day responsibilities of maintaining financial and economic stability in their healthcare institution. Green used the example of Kaiser Permanente. The health system "raised a 4.4 billion bond issue", and designated 1 billion of that amount towards green bonds, which are "bonds that are specific to environmentally sustainable projects". She then stated that "investors are demanding these (healthcare) institutions give them opportunities to invest in missions that also align with the money."

Pertaining to up and coming leaders in healthcare who want to remain authentic in their own leadership, Green laid out the three phases that typically structure the stages of making an impact investment. The first phase, she stated, is to use "minimal screening is to minimize objectionable stuff such as investments in alcohol, firearms, tobacco" and vices of that nature. The second phase is to utilize "environmental, social, and good governance practices". Good governance, as Green put it, "looks like diversity on boards, the makeup of decision making as it relates to governance practices, and how these institutions are approaching crisis situations" Green reinforced the point by mentioning that "diversity on boards is of a particular interest, data suggests that when there is more diversity on boards and gender led organizations with women, that the performance is higher."

Green used Starbucks as an example of a corporation who regularly utilizes impact investing, whose goals (which are listed on their website under the "social impact tab") include "providing 100 million trees to coffee farmers by the year 2025, investing a total of $50 million dollars in the Global Farmer Fund by 2020, and making a global commitment to the hiring 10,000 refugees by the year 2020" among many more. The third phase Green outlined, was "Thematic Exposure", or "looking for things in specific categories that align with your own values", which provides healthcare leaders who want to remain authentic, a wide scope of potential opportunities to start their own impact investing initiatives.

Unfortunately, Green stated that the current status quo suggests that there "will be winners and losers in healthcare". It is the responsibility of the leaders of this industry to remain authentic to themselves, and to the communities in which they serve, by using their skillsets, resources, and interdisciplinary collaboration with others to ensure that they continue working towards the goal of making sure there are more winners, than losers.