Every health system leader has unprecedented executive management challenges facing their organization in the wake of the pandemic. With COVID-19 changing the healthcare system we know, everyone should take a breath and start optimizing capacity and throughput. Angie Franks, CEO of ABOUT Healthcare, discusses how leaders must significantly restructure operations to keep meeting the unpredictable demands of patient experience. She explains the best way to take in new patients without sacrificing your revenue and resources. Angie also talks about why leaders should give more attention to new and innovative processes instead of jumping back to old blueprints that are now ineffective in a pandemic-hit world.
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Optimizing Capacity & Throughput Angie Franks- About Healthcare CEO
Ben and Darin, we recorded a great conversation with your boss, the CEO of ABOUT Healthcare. That was fascinating. It was great and you guys should be proud. The thing that I wanted our audience to not miss is what Angie shared and frankly, what the two of you guys shared too. That is it’s time to stop, take a breath, and think about how we’ve been operating, and what needs to be different for the future in terms of changing our source of revenue. Make sure that instead of matching expenses to our shrinking revenue, how do we increase our revenue so we don’t have to worry about all that other stuff? This episode has some wonderful nuggets. Don’t you agree?
I totally agree.
Angie is a powerful leader. She has not only a wealth of personal experience but a great and broad breadth of understanding of what’s going on in the industry with all of the leaders that she has been constantly interacting. She brought a wealth of information and value to the table in this episode.
She sure did. Thanks, guys. To our audience, get your pad and pencil out and take some notes. Here’s our interview with Angie Franks.
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Thank you for coming back to the show. It’s good to have you back with us. It’s also good to have Darin and Ben with me. Welcome, guys. It’s good to see you again.
It’s always a pleasure.
This discussion is very interesting and it’s very interesting for you guys. Everyone knows that this show is sponsored by or brought to you by the Baldrige Foundation for which we’re very grateful. We’re also very grateful for the sponsorship of ABOUT Healthcare, of which you two are executives. We always mention that. I do try to make sure that we talk about topics broadly and that it’s not just an advertisement. ABOUT Healthcare has done a great job of helping people in this change imperative and optimizing capacity and throughput. You guys always bring up great comments for our audience.
We have such a treat because we have Angie Franks with us. She is your colleague and the president of your company. She is the CEO of ABOUT Healthcare. She joined the company in 2017 and came off the board. She was chairman of the board and I always love to see that. That’s a great way to onboard a new leader and somebody very familiar with the organization. Before ABOUT, Angie has spent about 30 years in healthcare technology.
The list of companies that she worked with is quite impressive list including The Advisory Board Company, Lawson Software, Healthland and GeoAccess. She also serves on the boards of many innovative creative companies and does some great work there as well in her non-work hours. Angie Franks, thank you so much for taking the time to talk with us on the show. Welcome.
Thanks, Roger. It’s great to be here. I’m looking forward to the discussion.
I am too. We had a great discussion in preparation for this. We talked about this and I said, “We should have recorded that,” because we came up with some great thoughts and ideas. Hopefully, we’ll capture some of those. Ben and Darin, I’m removing my restriction from you guys. Feel free to talk about your company because even though this is a much bigger topic than what is the target for your company, you guys have tremendous experience in this area. You’ve learned a tremendous amount about how to support our healthcare leaders in this very challenging time. Thanks all for being a part of this.
Angie, we talked about the challenge of how difficult it is to innovate or even think clearly when you’re in a crisis. It’s not hyperbole to say that many of our healthcare leaders have been operating out of a crisis. We talked about the fact that maybe it creates a lack of oxygen in your brain and you don’t see what’s right in front of you. What your company and your extraordinary skills do is help people figure out what to do next when you are in a situation where there doesn’t seem to be any good solution.
Why don’t you take a couple of minutes and talk about your reflections? You’ve had great conversations with a lot of healthcare leaders. You’ve been able to make some suggestions to them in terms of what they can start looking at. I’ve got some other questions I want to ask later, but why don’t you start by sharing with our audience what you spend your days doing and how you see some solutions that others might not see?
You’re spot on, Roger. The environment that our healthcare leaders, healthcare organizations, nurses and clinicians have been operating in for the past few years with the pandemic and all the related fallout has been truly a crisis mode of operations every day. I can speak from my own leadership experience. When you’re in a situation where you’re in a crisis for whatever reason, you get into an operating mode that is more triage. It’s more command and control, and making decisions at the moment because it is the only way you can operate in your day-to-day.
During a crisis, you get into an operating mode that is more triaging. Making decisions at the moment is the only way you can operate in. Click To TweetAs the pandemic has started to shift into more endemic stages, if we can even say that we’re there, the fallout is happening from the pandemic and the health system leaders are now needing to shift into a different mode. What they’re faced with is running an organization and running a health system with challenges that they’ve never faced before, not to the level that we have in front of us.
Making that transition from how are you operating in this triage day-to-day crisis mode to, “I now have a long-term existential crisis that requires a different way of leading, thinking and planning,” it’s hard to make that transition as a leader. It’s hard to get your team out of the day-to-day and into, “How do we face these much bigger and very complicated long-term challenges?” You’re right. We work with health systems. We look at these issues. We look through the slice that we can help health systems affect. We look through the lens of three critical operational levers for health systems that they need to take control of in today’s world moving forward. I say that and it sounds so easy but those levers are demand, capacity and throughput.
Coming out of the crisis that we’ve been in, it can be easy to go, “I don’t have to take control of that. Demand has been off the charts. I need less of it. Capacity has been impacted because I don’t have the staff.” Throughput, we’ll get there at some point. It could be easy to defer or think that maybe you have a problem with one of those levers and not all of them.
What we see is when we’re looking at health system operations now, you’ve got to be looking at those three levers. You’ve got to be looking at the entire landscape for your system and start to very proactively put in plans to take control of each of those. That is key to financial performance. It’s key to operational effectiveness and reducing friction and workload for staff. It is absolutely a clinical impact on patients. It’s going to elevate performance across all three levers of the health system.
Angie, the first two that you mentioned are demand and capacity. Are you feeling or sensing from the people that you’re talking to at health systems that there is truly increased demand? Does it feel like increased demand because we don’t have the capacity to staff people?
They’re related. When capacity is down because we got staffing issues, we had to shrink the size of our in-patient capacity. Certainly, that can feel like we don’t have a demand problem because we’re filling the available beds and resources that we have, but the issue is broader than that. Let me explain a bit. The demand for services is not coming back exactly the way it was prior to the pandemic.
There are reasons for that. One of the reasons is it’s more complex for health systems in terms of where different services should be performed, and how we start building plans for our organization from a reimbursement and revenue perspective. Also, how do we put in place the operational infrastructure to guide that decision-making for where patients should go and be for the care that they need?
It’s much more complex now than it was two years ago. It’s complex because of reimbursement shifts. It’s complex because of the distribution and care settings. We have care settings now that we didn’t utilize much like more acute care services in the patient’s home than what we’ve done in the past. There’s complexity there. What is easy to do is to say, “I’m not even going to worry about demand because I just have this capacity issue. The capacity issue that I have is staffing-related.” I’ve got to solve my staffing issue and 100%, this is a very big area of focus for health systems. They’ve got to work on staffing models, etc. so that they can keep as much of their available acute capacity open.
If you don’t think about demand in parallel to that capacity issue, and you aren’t thinking about how you are bringing in the patients and the right cases in support of your health system and the service lines that your health system can and should deliver, if you defer that front door to the emergency department and scheduled procedures, you are missing a significant channel that is almost pure margin for the health system financials and the bottom line.
Becoming more proactive, thoughtful, and less dependent on who comes in through the ED becomes an opportunity for improved case mix index, improved margin, improved utilization of your resources across your health system, and alignment of that demand to the right resource and facility. Ultimately, it shows up as a margin opportunity for the health system.
I’m seeing a couple of things, Angie, relative to what you said. No one is doing this on purpose. I think it’s human nature that there are still people who have grown accustomed to the crisis. It’s a real adrenaline rush. We in healthcare are really good in a crisis. What happens in a crisis is that all of the titles and hierarchy go away. We are shoulder to shoulder. Everybody is working hard together. It doesn’t matter if you’re a tech, a nurse, a doctor or whatever. Everyone is working in a crisis trying to solve this immediate problem in front of us. Some people have gotten used to that. They still refuse to let themselves move out of this crisis mode to do the deeper thinking that you were talking about.
The other thing that I’m seeing, and I wonder if you’re seeing it too, is you would think that healthcare leaders and decision-makers would say, “Now is the time for us to be innovative and creative. How are we going to get the demand back to where it was?” It opens into thinking new thoughts and doing things in a new and different way. Unfortunately, what I see is a lot of people saying, “Here’s our capacity. Here’s our demand. It’s lower. Let’s work on our expenses.” We do everything we can to match our expenses to meet this new lower demand and our capacity issues instead of seeing this as an opportunity. Ben is itching to get in here.
I just wanted to comment on that, Roger. As you and Angie have been talking about, it’s very difficult to innovate when you’re in a crisis, particularly a financial crisis, because the natural instinct is to tighten your belt. The problem is what also happened in this crisis is it unleashed consumerism. Consumers were told, “Don’t come in because we were seeing COVID patients.” They didn’t and they found other ways of getting healthcare.
For example, telemedicine is up well over 330% usage since COVID. As Angie pointed out, there are other pathways that they’re using. There is also an avalanche of new non-traditional players coming into the space. There is an explosion of consumer-based technologies to support those other things. The problem for health system leaders is they don’t have time not to say yes. They have to be able to figure out how to say yes to the consumer. The challenges that have plagued us before in health systems where we can’t say yes because we don’t have a bed doesn’t work anymore.
In other words, if a patient’s call is requesting access and they’re in a cardiac condition, the old adage was to just bed them. If we don’t have a bed, delay or whatever. Now, you have to understand all your capacity across your entire enterprise. It may have been in the cath lab in your cardiac service line and done just fine but you didn’t know that that was available because that’s not how you asked or processed questions upfront.
Whether you said no or not, the answer was no to the consumer and they went somewhere else. That compromises the ability to recover financially because there is a known reduction in volume post-pandemic. The health systems are tightening their belt, not all of them, but a large number have not yet gotten to a point where they can say yes.
I want to build off of that for a minute, Ben and Roger, and address some of the comments that you’ve made leading into that question. When you’re operating in a crisis, there is an appeal to it. You all feel it. We’re all in this together. We’re all on the same team getting things done. There’s an adrenaline that comes from that. That can be energizing and motivating. Getting out of that requires effort. Having led tech companies and having been in situations where I’ve had to maybe lead out of a complex situation or lead through a turnaround and a phase in an organization, there is an adrenaline rush that comes from that. You can slip into that as your normal operating mode.
When I look at these hospital leaders and what they’re managing now, I don’t think there is a more difficult job. I cannot imagine what they’re dealing with in the executive suite across the breadth and the size and scope of these organizations. I have a tremendous amount of empathy from the outside looking in at what they must be dealing with.
It is easy to start to feel like, “I got to go back to the things that have worked in the past.” The old playbook was we could always cut costs and manage our margins. The margins weren’t that significant, a couple of 3%, 4% or 5%. You could always cut costs to manage your margins and that lever is gone because they’re not in control of the cost right now, partially with the staffing issues and partially with supply chain and inflation, etc.
They haven’t been in control of revenue in the middle of the pandemic. The revenue doors get shut and then even the other revenue doors. The emergency departments are like, “Don’t come. We’ve got all these.” The unthinkable happened. Revenue was shut off, the costs, inflation, etc. The old playbook won’t work. Back to my empathy comment for these teams, they are facing an enormous challenge. There isn’t a blueprint to go to and it’s easy to say, “I’m just going to turn to things that have maybe worked in the past. I’m just going try to leverage systems and processes that we had in place, and make them help us do something that we need to build on some competencies that we need to build on.”
It's easy to leverage the systems and processes you have in place. But when revenue is shut off and costs are inflated, old playbooks won't work. Click To TweetWhen I look at these systems, I think about one of the strategic questions filtering through all of the noise that they’re dealing with. Ben mentioned the competitive threats, the new entrance, and the people that are coming in. They are delivering a fabulous patient experience at a really low cost and are super on-demand, whether that’s telemedicine or retail organizations that are jumping in. Pharmacy companies, CVS and Walgreens are all coming after that healthy well ambulatory base.
What do hospital systems do that no one else and no other organization can do? That is acute and complex care. They are the best in the world at doing that. How do we say, “You’ve got to get focused on locking in what you are better than anybody else at doing? Make sure that you’re getting the patients coming in your door for those highly acute and complex cases, and you’re getting a better mix or more market share of those available cases than what you’ve had in the past.”
That is a proactive revenue growth strategy, not revenue cycle management on the backend. I know that’s important, but you don’t have to be victimized by who comes in. You can proactively go, “I’m going to build a model and a way of operating that allows me to grab more market share. That’s how we help them.
When you talked about the revenue door being shut, it’s opening that door and saying, “We are ready. This is what we specialize in. You can’t get this anywhere else, so come on in and you’ll be happy.”
“We love you here” Also, those channels to get those patients in. This is a B2B channel. You’ve got to lock up those referral sources from across your state, region, physicians, and other hospitals. You’ve got to build those relationships and make it easy to operate with your health system.
Thank you. Darin, I know you have a comment from the provider side on how things have required adjustments. Go ahead, Darin.
Angie, we’ve worked together for a number of years. One of the questions I wanted to pose to you, Angie, is a follow-up to what you mentioned. You sort of already answered it. I think, Roger, with your experience, you can certainly lend to this as well. You talked to, interacted with, and interviewed a variety of leaders from organizations across the country. Roger, you’ve been in that seat a number of times as well. What are you seeing the most proactive, energized, and engaged leaders doing as they try to wrap their arms around this specific area?
I would plug that a little bit more by saying, “You’re talking to organizations that are going through profound M&A activity and joining organizations together. They’re looking at their systemness across their organization, and how they can leverage their resources, brand and geography to get at those exact issues of demand capacity and throughput. What are they doing? Can you maybe share a little bit of that secret sauce that you’re hearing from those leaders with the audience?”
Angie, I’m going to toss it to you. Before I do, I want to say that part of the answer is enlightened leadership that has taken control of this issue. They have taken the time deliberately and intentionally to rise above the crisis. They look at the battlefield or the challenge and say, “Here’s where we ought to be going.”
I can’t get mired in all this stuff. I’ve got good people doing that. My job is to say, “Where are we going next,” and to begin to build the organization the capacity and the direction to go there next. That’s why this show is so important and why we work so hard to get thought leaders, and support and help to get people the encouragement they need to get there. Angie, on a very granular level, who in the organization are you seeking to help make the decision to do exactly what Darin is suggesting?
When you’re saying, “Who in the organization,” you’re talking, “Who in the health systems?” It’s such a good question, Darin and Roger. We talked to and I talk with many health systems every week and every month about how they’re thinking about these issues. I’ll tell you a few themes that I’m hearing now that are different from maybe what we were hearing a year ago or even two years ago.
First, I would characterize that there are health systems that almost look paralyzed to me. They don’t know what to do, so they do what they’ve always done. That is maybe the most troublesome for me because we all know that it’s not probably not going to end well. I have empathy for the amount of challenges that they’re dealing with. There are other health systems that are saying, “We can’t boil the ocean here. We’ve got a bite off chunks of this issue, solve it, and move to the next one.”
Those health systems are taking a very practical approach because they are looking at ways to say, “How do we fix this problem and then move to the next thing?” They’ve got a plan. There are a couple of examples that I would highlight. First, I do think the for-profit health systems are very thoughtful in this regard. They have different pressures. We can debate for-profit and non-profit healthcare, pros and cons and all of that, but a for-profit health system has investors and people looking down on their performance. They have a significant financial impact if they’re not performing well.
They are often ahead of the market in terms of how they’re looking at operating as a business to still provide phenomenal healthcare and great outcomes. I think those for-profits are leaders, but there are nonprofits and very large health systems and smaller regional health systems that are also doing a fabulous job at this. Those are folks that have clarity of purpose and mission balanced with, “What do we need to do?” It’s the margin and mission. “How do we make sure that we protect and preserve what we have in this health system so that we can give more care to the people in our region?”
They’re looking at this with a thoughtful and pragmatic approach. I’ll give you an example. RWJBarnabas is a very recent example for ABOUT. This is a merger of multiple health systems, multiple cultures, and lots of different ways of operating. It’s the largest health system in New Jersey. They have a phenomenal leadership team there and a leader that has a vision for how they can and should operate to take much more control of getting the right patients into their health system, and then utilizing their resources most effectively.
That is not the end of the road for their plan. They have phase 2, phase 3, and phase 4 mapped out. They’ve started taking those steps and they’ve had tremendous results. This is an organization that tried to take control of demand and they tried to do this with an EMR. They tried to do this with other point solutions and maybe some home-grown solutions. You’ve got to have something that can operate and help drive that systemness and growth. That’s one example of positive outcomes that we’re seeing both on the for-profit and the nonprofit side.
Thanks for that very positive example and it’s good to have those. How about getting back into the practical? Who in an organization would be threatened by this approach? It’s a very different approach. Is there anybody who would be threatened by it and maybe lose their power base if we shift to this very focused approach?
The threat comes in the form of change management. At the end of the day, you’re going to change operational processes. It’s going to impact how people were doing their jobs. Even if that impact is positive, any change management exercise and any sort of change to the work in the operating flow can be disruptive to people. It can be disruptive, frightening and scary. There’s that dynamic. It can be easy especially when you’re a tech company.
We have the technology. Technology only enables a change in workflow and process flow in the way we’re going to operate, but technology can also become a threat to the technology leaders inside the organization to say, “I don’t want to complicate my environment or we have systems that we think we can use for this purpose.” Sometimes, there can be a thread there. I understand the reasons why they have to think through those decisions, but that would be another area where you could see some threat, not across the board. Those come to mind.
We’ve talked about the what. The what is creating new systems and taking a look at a different place to solve problems and get out of a crisis. Also, to get into a more proactive space and start recapturing some of that revenue that maybe they never had. That’s good. Why are we doing this? What’s the “So what?” The so-what is you’re headed in a dark place if you don’t because you’re not managing your capacity. If your goal is to get your capacity to match the demand, that’s a race to the bottom, so we’ve got to do something.
The largest bottleneck to capacity isn't staffing. It's throughput. It's discharging patients in the most timely manner possible. Click To TweetNow, here’s the “What now?” Angie, Darin, Ben, and any of you guys, what does it take to create a teachable moment with the right decision makers in an organization to get them to see this, pull up, take a breath and say, “Here’s what we’re going to do now?”
I’ve got a clarification of the detail. In other words, it’s a lot easier to solve a problem when you know exactly what’s impacting you. For example, many of the health systems that we work with are notably and understandably trying to fully leverage their EMR in this kind of effort. The challenge is that it’s pretty good with moving your patients around your system, but it has been pretty bad at getting new patients in, in a timely fashion. Typically you’ll have maybe single-digit new patients coming in.
What we have found is because you don’t have all of the processes in place to be able to expedite that patient getting in, you’re missing a lot of growth. We’ll see sometimes new volume go up to 50% or 60% of your mix because you’re changing the process. The other thing is the turnaround time of these things. For example, when you have a highly complex transfer, if the transfer exceeds six hours from the time of the request until the patient gets here, your mortality rate goes up to 60%.
When we are able to go in and help them arrange everything so they can get a patient in within the hour, for example, not only does that have a significant improvement in the front door, but also in terms of their mortality and so forth. What we’re seeing is often leaders are not aware of all the components of that decision. When we can make them aware of it, it makes the decision-making a lot easier.
Ben, you’re spot on. The way we do that is we talk about partnering with our clients. I know that can be a flippant and overused term, but here’s how that looks. We’re not going to lay out a proposal and a plan and ask somebody to invest in ABOUT without us starting the investment in them. The investment in potential ABOUT partner is our consulting and our outcomes engineers come onsite and look at the current state of how the health system is operating so that we can say, “Here’s what we found.” We don’t charge for this. This isn’t like a fee-based consulting arrangement. We come in and look at it so that we can say, “These are the problem areas.”
We’ve been doing this enough years that we can say, “Here’s what that’s costing you.” What that then in turn allows us to do is to say, “This is how we would solve it for you or with you. This is going to be the outcome in terms of volume and terms of margin.” We will put our contract. The way we contract with our clients is we put skin in the game to achieve those goals. We’re not going to just sell you something. We come in and say, “Let’s partner to achieve this outcome.”
That is critical for anybody working with health systems now. If you can’t back up what you do with money and show how you’re going to be in the boat with them to achieve the outcome, it’s hard to get something done. For us, that’s the way we partner with our clients to achieve an outcome and define and diagnose what the situation is. If there was a situation where it’s like, “I don’t think I could do a pretty darn good job now,” we would say that as well. I haven’t seen that yet.
Angie, every health system has invested significant dollars in their EMR. It doesn’t matter what it is, but I think everyone feels a false sense of security that their EMR can get them to where they need to be by just analyzing the data. What are your thoughts about that?
Health systems have made massive investments in IT infrastructure, EMR being one of those and likely the most significant investment. When we’re working with health systems, this isn’t about adding another piece of technology to do something in some silo, rather it is to leverage and extend investments that have already been made. EMR is all about things that are happening inside the four walls of the health system. You’ve got investments in your secure messaging apps, staff scheduling products, and bed and capacity management system. All of these things are our inputs into a decision-making process for optimizing demand capacity and throughput, but they are all siloed. They are all disconnected.
We’re pulling these pieces together into a structured workflow and decision-making process. We’re pulling, leveraging and extending already existing investments that the health systems have already made. When we do that or when we codify that process, data is an output of this. That data does not exist in the health system until we come in and pull this all together, and that data becomes important for insights and communication back with, “Where are we getting patients? Why are they sending them? What service line? Where are we having delays and bottlenecks to care?” That data that gets created from us pulling together and levering existing IT investments is a strategic asset for the health system.
Everyone talks about turning data into information. This is exactly what you’re talking about doing. I have one last question for you, Angie, and I don’t think it’s redundant. If you had the opportunity to sit in front of any executive leadership team of any health system, sometimes you can get your point across more with questions than you can with information. What questions would you ask this leadership team to encourage them to change their thinking and to start looking in the right place?
I would start with those three key levers. I would start on the demand side. I frequently asked this question, “Who owns revenue for your health system?” There’s almost never an answer. The answer is always, “The revenue is a cycle.” I’m like, “I’m not talking about that.” What we’re talking about here is a very strategic and proactive plan, getting very focused on those referral sources, and how to drive the right volume in and then to utilize that across your organization. I would start with, “Who owns revenue for your health system?” From there, that will lead right into the capacity question and the throughput question. The largest bottleneck to capacity isn’t staffing. It’s throughput. It’s discharging patients in the most timely manner possible.
All of these issues are disconnected systems and processes, and people trying to do things in a very manual manner. When you look across all three of those, the impact is revenue and margin.
What a beautiful question and we’re going to close there. Thank you, Angie. For our audience, that’s the value right there. Get their attention, stop for a moment, take a breath, and do things in a new and different way that’s going to yield the results that they are looking for.
Thank you so much, Angie, for the work you’re doing. I know that you’re very passionate about this. It’s very obvious. That comes through in your sincerity. I wish you much success. Ben and Darin, it’s great to be with you. Thanks for your questions and comments, and thanks to our audience. We’re going to continue to do our best to bring you this type of content in the future so that you can do your job better. That’s what the Baldrige Foundation is all about. That’s what we’re all about. Thanks for joining us. We’ll see you next time.
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About Angie Franks
Angie Franks joined ABOUT as CEO in 2017, bringing with her a strong reputation for transformational leadership and a proven track record of increasing revenue, driving new market growth, and building high-performance teams.
Before joining ABOUT, Angie spent 30 years in the healthcare technology space, holding leadership positions with a number of prominent healthcare firms, including The Advisory Board Company, Lawson Software, Healthland, and GeoAccess. She currently serves on the boards of Medical Alley, the Pinky Swear Foundation for children with cancer, and the United Hospital Foundation. She previously chaired the ABOUT board of directors.
