It’s the story at health systems across the U.S.: Inflation and labor costs have heavily outpaced reimbursement. It’s the first industry-wide recession the healthcare sector has ever faced. Because of the financial pinch, systems are forced to reckon with new business models and cost-cutting strategies. Consolidation is abundant. But for administrators like Shannon Striebich, president of Trinity Health Oakland and Trinity Health Livonia as well as senior vice president of operations for all of Trinity’s operations in Michigan, the pinch means getting creative with costs and technology.
This interview has been edited for length and clarity.
What are the current roadblocks to operations?
I’m sure you’ve heard it all before. As we’ve come out of the pandemic, which was already challenging, we’ve faced ongoing struggles. One is staffing and that continues to be a challenge, particularly in the area of acute care. We’ve had big issues with recruiting techs all over the hospitals. It’s pervasive and concerning. Then there’s the premiums associated with labor costs and inflation. The trifecta is the changes we’re seeing with reimbursement. We take care of a lot of CMS (Medicare and Medicaid) patients and there’s a push for outpatient services (which reimburse less). Those things together make for a challenging environment.
Cost cutting is inevitable, it seems. Where do you even begin?
Something we’re doing differently today, in part because of staffing and cost, is putting a virtual nursing model in place. This allows us to extend our experienced caregivers to support a cohort of nurses, usually newer, less experienced nurses. I put this in the innovation category and I think we’ll see a lot more of this. We’ve seen improvements in multiple dimensions of performance. It means we can stretch our more experienced caregivers and pair them with our new caregivers to give them support via a second set of eyes. We’ve seen improvement in patient satisfaction. Patients and patient families can call and speak with a nurse on camera right on the TV in the room.
We’re also looking at documentation requirements. The document load for doctors and nurses is a big reason for the burnout in healthcare. They are exhausted by the requirements of the virtual medical record. We’re also looking at how to leverage our national size in terms of group purchasing arrangements and standardization of our pharmaceutical orders. We are also looking at our footprint and trying to figure out how we can remove duplicate services in every single community and leverage our talent to prevent any gaps.
Virtual nurses seem to be a popular thing right now. How does it work?
They are employed by us and sit in our campus. We’re not using an agency service and they are not working remotely. It’s really intended for our more experienced nurses. You have to have real-life experience to serve in that virtual nurse role. It helps extend their careers. Really, it’s an interesting way to leverage technology and divide caregiving work to improve the experience of everyone involved. It gives us more teams, virtual or otherwise, at the bedside. For patients and families, they want to talk to whoever is taking care of them or their loved ones. Sometimes it’s hard to catch the right caregiver, but now we can arrange a virtual nurse meeting right when they arrive. It’s really nice to see innovation like this and for it to have some good promise for our industry.
It’s very expensive to build in healthcare right now. Is this why we’re seeing more outpatient facilities? Because it’s a cheaper investment?
There’s multiple answers to that question. We still have pockets of the state that struggle with access, particularly our more rural areas. Frankly, we’ve got a lot of inpatient hospital beds across Michigan. So where we’ve invested our capital is in outpatient access points. That’s where our industry is shifting to. There’s a lot more strategy to consider when building in an ambulatory surgery center, so we’re looking at primary care access because it’s really important. That’s one of our more strategic investments. We’re doing more and more of this type of investment. And, yes, smaller sites of care are less costly to build. Inflation in construction for healthcare is in double digits.
We’ve seen lots of consolidation in the industry. What’s Trinity Michigan’s strategy? Buy or build?
We’re a national system in 22 states, so our appetite is different than most systems here. But Michigan is our largest region in terms of size and net revenue. We’ve got good coverage across the state in a band from Southeast Michigan to West Michigan. And we’ve got a really good relationship with Michigan Medicine. That’s been an effective strategy for us to bring a specialty to our communities — doing it with a partner. It’s been of mutual benefit to both parties. But as we consider our growth strategy, we’re focused on the same metrics — how many lives served, what percent of the market (share) and are there communities that strategically make sense? Those are the things we’re constantly reviewing.
But we do have a gap in the middle of the state. We talk all the time about whether we need to solve a problem there. We have experience bringing out services to more rural hospitals. The question is whether we need a presence in the donut in the middle of the state around Lansing. What is the strategic value? Is that a good decision for both the health system and the community? These are the questions we’re asking ourselves. That doesn’t mean we can’t have a presence without building a hospital. The future will be interesting.