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Government regulations hinder growth. Hospitals are eager to invest in growth opportunities, but the lack of predictability in how future government regulations may impact such ventures is forcing hospitals to limit their investments. Such investments are not cheap, especially when considering the expenses associated with hiring physicians and nursing and technical staff.

“The role of government regulation … is a massive factor that we have no control over and can change a very good investment into a bankrupt investment with a stroke of a pen,” Dr. Summerside says. “It makes us not invest in a lot of things that make sense and have longer payoff horizons because we’re not sure if the horizon will ever get there.”

Since a solution to the issue of rapidly changing regulatory and payment rules is not in sight, hospitals will struggle to reach their true potential, thus depriving patients of the finest care possible, he says.

“You have a set of rules today that make it very smart to build this or that or develop this business line and a year later, it’s bankrupt after you put all of the money into it because someone decided to change the rules. It is a very difficult business reality that I think hamstrings medicine from being as efficient as it could be.”

Failure to invest in the “right” physician executives hurts integration.   Too many hospital administrative boards are viewing physician executives and clinical leadership as political panderers to pacify their medical staffs, which is hurting effective integration of physicians and fails to encourage collaboration between the hospitals and physicians, Dr. Summerside has observed.

Since physicians can easily move their practice to another hospital or even potentially open a competing practice, integration and collaboration with physicians is crucial to a hospital’s success. With much of the success tied to the effectiveness of clinical leadership, hospitals should take a fresh look at the individuals hired to fill these roles and not shy away from investing in these positions.

“I think the systems that will do well are the ones that are able to engage highly competent physician executives, recognize that value and employ them to make the machine work better,” Dr. Summerside says. “I would postulate that many healthcare systems struggle because they don’t appreciate this.”

Hospitals are often looking to fill these leadership positions with less-qualified — and thus lower-paid — physicians. While such appointments may result in financial savings for organizations, when compared to the salary that may be required to hire a physician coming from a more profitable specialty, these individuals brought in to fill these roles lack the experience necessary to bring about positive changes and results.

“So you end up with poor physician leadership, if there’s any at all, which perpetuates this kind of laissez-faire medical environment where the specialists have very poor relationships with the hospitals and little integration and little creativity goes on,” Dr. Summerside says.

The solution is for hospitals to view these positions for what they truly are: Leadership for the hospital’s most expensive and important investment — the physicians. To fill this responsibility, hospitals should recruit a high-level physician and reward them with appropriate compensation, training, freedom and authority to make the hospital’s business work effectively.

“They should identify physicians that are familiar with the high-tech, high-compensation world of a tertiary hospital,” Dr. Summerside says. “Who is the most likely to sit down in a meeting with neurosurgeons and orthopods and ER docs that drive the revenue of the hospital and have any credibility?

“The institutions that can harness executives at that level — the richer will get richer and the poorer will get poorer, and fast. Medicine is way too much of a team game now. All the pieces have to work together very well.”

“Transparency” will fail with lack of standardization. “Transparency” in healthcare has been a buzzword for several years now, with growing pressure on organizations to publicize their costs. Unfortunately for hospitals and patients, such transparency could actually serve to deceive patients about what is truly important unless the government develops standard weights and measures for quality and safety.

Dr. Summerside correlates the need for such standardization to that of the automobile industry a few decades ago, when manufacturers did not have to meet extensive safety standards. Manufacturers were free to sell whatever they could and the consumer would purchase automobiles with a belief they were buying good, safe cars. Then came Ralph Nadar’s book, Unsafe at Any Speed: The Designed-In Dangers of the American Automobile, which lead to Consumer Reports and other third-party measurements, and eventually government crash safety tests.

“That’s a basic standardized weight and measure, and made the true quality [of automobiles] transparent to the consumer,” Dr. Summerside says. “Once that occurred, look at the radical changes in the automobile industry. It had to start with that.”

Healthcare presently lacks such a weight and measure, and if organizations merely publicize their prices, and patients (consumers) base their decisions solely on this information, they may be choosing a care provider for the wrong reason.

“If one guy is charging $700 for a hernia and the other guy is charging $5,000, and the $5,000 guy has a 1 in 1/1000 infection rate and the other guy has 10/100 rate, who is really cheaper? How transparent is the fact that you published just the price? That’s the fraud the insurance companies and their fee schedule panels have perpetrated

“I think that if we can truly have honesty about our practices with our patients and our outcomes, that will be the best thing for doctors and their systems,” Dr. Summerside says.

He believes the government must become involved and start developing such weights and measures slowly are carefully, even if it is one procedure at a time or just starting with tracking and reporting wound infection rates. Unfortunately, such efforts would require unglamorous grunt work, something politicians are typically eager to shy away from.

Specialties relying on government payors to struggle. Dr. Summerside has seen an ongoing struggle for hospitals to recruit physicians for all specialties, but the struggle is magnified for those relying primarily on government payors. And it is a struggle that will only get harder with continued reimbursement cuts and regulatory restrictions.

“Medicare and Medicaid rates in our environment are unsustainable for things like cardiology, pulmonary, critical care, ER,” he says. “If you’ve got a significant portion of your practice in the government payor arena, you are really going to struggle, at least in this area of the country.”

Need for staff forcing tough decisions. The best of anything is always in short supply, and such is the case with good nursing staff and other hospital staff. Many hospitals are struggling to fill openings and ultimately settling for whatever is available, which is an unfortunate and dangerous trend to start, Dr. Summerside observes.

“We’ve drawn a line on not accepting poor fits and that can be a hard line, but I tell you, once you get off that position, there is no bottom. If you accept poor performance, it drives all performance down.”

Payor consolidation another unfortunate trend. The damage caused by payor consolidation over the past several years, which has the dwindled down the number of payors controlling most contracts to three, or four if you consider Medicare, is terrible news for hospitals and patients, Dr. Summerside says.

“Anybody who thinks the consolidation of these insurance companies is good for the patient or good for cost is nuts. That’s a concept that went out with Teddy Roosevelt. That’s why the anti-trust legislation was initiated. But the current administration, the Department of Justice, has turned a completely blind eye to this stuff,” he says.

Effort and strive for excellence still rewarded. Despite all of the challenges and bad news which seems to impact health care on a regular basis, the opportunity for excellent patient care excites Dr. Summerside.

“I still believe, in my heart, despite of all of the regulatory crap we go through, in the United States of America, if you get up in the morning and you work a little bit harder and a little bit better than the other guy, you will succeed.

Such enthusiasm toward his practice and organization is a significant qualification for anyone hired to join his staff and is the basis of a question he asks prospective physicians during interviews.

“I say, ‘if you get up every morning and look in the mirror and you can ask yourself why should any patient come to see me instead of somebody else, if you’ve got an answer for that, you’re going to do great with our group. But if you don’t know or you don’t care, you shouldn’t come here.’ If we can keep the right group of guys who get up every morning and give patients a reason to see them instead of somebody else, the patients will be better off.”

Dr. Paul Summerside is the chairman of the board of one of the most successful hospitals in Wisconsin, the Aurora BayCare Medical Center. He has been a dynamic leader on behalf of this organization. Aurora BayCare Medical Center is owned in large part by the Aurora Healthcare System and is located in Green Bay, Wis. He also serves as the chief medical officer for BayCare Clinic. In this role, he is responsible for all physician relations, recruiting, quality assurance and physician contracting. He is also a residency-trained and board-certified physician in emergency medicine.