I have written about the Rating Agencies in the past and will give an update about where we are in a bit. What caught my attention recently was an email I received from the American Hospital Association that addresses national issues dealing with hospitals and healthcare. In the email they referenced one of the Rating Agencies with the following headline and analysis:
Moody’s: State Medicaid cuts strain hospital credit ratings
State budget pressures, the slow economic recovery and the recent expiration of federal stimulus funding are placing downward pressure on credit ratings for not-for-profit hospitals that rely heavily on Medicaid, according to a report released today by Moody’s Investors Service. “We expect Medicaid funding pressures will significantly stress hospital credit quality for at least the next several years,” the report states. Based on Moody’s preliminary data for fiscal year 2010, not-for-profit hospitals struggled with the lowest revenue growth rate in more than a decade. “Revenue growth has been stymied on numerous fronts: declines in patient volumes, higher levels of uncompensated care, less favorable contracts with commercial payers, and, most significantly, reductions in federal Medicare reimbursement rates, a challenge which we believe will likely intensify given ongoing federal budget challenges,” the report states. “Medicaid reductions are creating yet another strain on top-line revenue growth that hospital management teams must address.”
So, how do the Rating Agencies View GHS? We went through several days of presenting our story and answering questions to panels of smart analysts in New York. In a way, it was like interacting with a group of consultants. Here are some of the strengths and concerns that came up:
-Strong business position and market share
-Strong debt service coverage
-Adequate financial performance and margins
-Large and growing employed physician network
-Strong and diversifying economy
-Leading market share and wide array of services
-Significant number of employed physicians providing multiple access points
-Improved FY2010 and FY2011 YTD operating performance and margins
-Improved debt to cash flow and debt service coverage
-Solid operating platform that includes large group of employed physicians and leading market share
-Good service area with below average unemployment
-Steady improvement in liquidity
-View the medical school as strategically positive
-Costs associated with Medical School
-Payor mix that includes16% Medicaid
-Thin operating margins
-High level of Medicaid, bad debt, and DSH payments which leaves GHS vulnerable to changes in governmental programs
The good news is there are a lot more strengths than concerns and the ratings bear out that fact. And, the To Do list for this coming year is pretty focussed and we are on it. How did we do? Really well:
•Standard & Poor’s (S&P) – Rating and outlook affirmed at AA-
•Moody’s Investors Service – Rating and outlook affirmed at A1/Stable
•Fitch Ratings – Rating downgraded from AA to AA-
What is the context for these ratings? In other words, how do we compare to other Healthcare Systems’ ratings S&P, Moody’s, Fitch. I have laid out their ratings and put my comments in the parentheses next to the categories:
Regional Competitors: (These are the systems I think about the most from a strategic, competitive standpoint. We are slightly below Carolinas and above Novant)
Carolinas Healthcare System – AA-, Aa3, NR
Novant Health – A+, A1, AA-
Local Community Hospitals: (All have solid ratings and we are above all of them)
AnMed Health* – A+, NR, AA-
Spartanburg Regional – A, A1, A+
Bon Secours – A-, A3, A-
Academics Health Systems: (This is the group that we will increasingly be compared to, but it is hard to tell, since some do not report or their rating is related to their respective University)
Duke University Health System – AA, Aa2, AA
Emory University Hospital ** – AA, Aa2, No Rating
University of North Carolina Hospitals – AA-, Aa3, No Rating
MUSC – No Ratings
To summarize, we are strong, stable, with the best ratings in the state, positioned for the future, and we have our work cut out for us – especially when it comes to state and federal funding.
I heard a story about a remote area in Africa that was experiencing attacks and destructive behavior by a group of young male elephants. This behavior is not common in the wild and was not happening in other areas where elephants and humans interact, so several gamekeepers and scientists were sent in to study what was going on. What they discovered was the herd had a noticeable lack of adult bull elephants. As a result of poaching and natural causes, the adult male elephants were no longer present in the herd. The young males were left on their own to figure out how to behave and mischief ensued. Just like in the book “Lord of the Flies,” when there was no adult supervision and the young boys ran amok. Their solution was quite fascinating. They located several mature males from other herds and airlifted them to this region. The adult males were introduced into the herd and almost immediately the young adult males settled down. The adult males would intervene when the younger elephants would start acting out. To me, a great example of mentoring, leading, and transferring knowledge from one generation to the next.
I thought of this story and made a personal connection after the last time I saw my friend – for the sake of the story let’s just call him Ernie. I brought my youngest son, Ethan, to go fishing with Ernie. Ethan loves to fish, actually Ethan loves to catch fish, and Ernie is an expert fisherman. He has decades of accumulated knowledge about fish – what they eat, where they hide, when they feed, etc. As the saying goes, he has forgotten more about fishing than most people know. It is a true joy for me to watch and listen to Ethan and Ernie interact. Ethan hangs on every word and follows all direction without question and Ernie demonstrates a patience and calmness that comes from a deep place of knowing. They talk about so much more than fishing, on this trip the conversations touched upon bodily functions, school, sports, etc. I once heard the author Alex Haley speak about the book “Roots.” He said he got a lot of the information for the book from his grandparents, more so than from his parents. He joked that the reason grandparents and grandchildren got along so well is that they shared a “common enemy,” the parents. I think that is funny and true and I imagine there is a little bit of the elephant story going on. Ethan needs adult elephants in his life.
What are we doing at GHS to foster this transfer of knowledge? I have written about the demographics of the medical professional in the past. Just like the baby boomers we are experiencing a wave of physicians in the process of winding down or finishing their careers. It is one of the main drivers behind the expansion of the University of South Carolina School of Medicine in Greenville. Viewed in one way it is a problem to be solved, viewed another way, it is a tremendous resource to be leveraged for the next generation of clinicians. For several years, we have actively been using retired or semi-retired physicians to teach our medical students. It is more than just keeping them “busy.” Although, my hunch is that keeping them busy after an active clinical career is probably good for them and their spouse! I think it is another example of the elephant story. The next generation of physicians need to learn from this generation.
There is great opportunity in the second half of life. I have noticed it with myself – at home and work. Now that I am in my 50′s, my goals and approach are different from when I was in my 30′s and 40′s. The measurements of success have changed as well. For me, margin and market share are first half of life concerns, transforming healthcare and the School of Medicine are second half of life concerns. And, I believe taking care of the second half will ensure the first half happens too. It is why I like to go fishing with elephants.
I have spoken about our commitment to Leadership Training in the past. A Gallup poll indicated that the biggest reason people voluntarily leave an organization is because of the relationship they have with their Supervisor – even more important than pay and benefits! It is not that people want to be “buddies” with their supervisor, but they do want a leader that is fair, competent, reliable, can provide feedback, etc. Those skills do not just happen, there needs to be an investment in training. At GHS we take our managers (nearly 650) off site every 90 days to give them the tools and techniques to be better leaders.
At the last meeting, one of our leaders, Sharon Dunning, presented on the concept of a “Just Culture.” She did a remarkable job and it would have been a great presentation for any industry or company. It is where we are headed. The following is a brief synopsis:
Just Culture is a movement in high consequence industries (such as aviation and healthcare) founded on a values-supportive model of shared accountability. It is about finding the right balance between asking individuals to report errors (or near misses) and appropriately holding individuals accountable for their actions. The basic principle is that when mistakes happen, responsibility rests with both the system and the choices of individuals within that system. It’s a culture in which the organization accepts accountability for the design of systems and answers the question, “How do we create systems in which individuals work to support our values and allow us to produce the outcomes we want to produce?”
In turn, staff are accountable for the quality of their choices, knowing they may not be perfect but can strive to make the best choices available. Staff are responsible for reporting both errors and system vulnerabilities. This movement addresses how we manage the risks of human fallibility and human error. A Just Culture is intended to reshape workplace accountability while ensuring fair and just responses to behavioral choices. A Just Culture meets the challenge to balance system and individual accountability.
The cornerstones of a Just Culture include:
• A learning environment in which the culture is capable and ready to constantly learn from each experience.
• An open and fair culture that strikes a middle ground between punitive and blame-free. Just Culture advocates a move away from focusing on severity of harm and who is to blame. It is a system free of severity bias (where response is based on the severity of the outcome). To implement a Just Culture, human fallibility is recognized and the expectation of human or system perfection is overcome.
• A commitment to proactive design of safe systems that anticipate and capture errors before they become critical.
• Appropriate management of behavioral choices. Staff and managers distinguish between human error (slips or lapses), at-risk behavior (a behavioral choice that increases risk where risk is not recognized or is mistakenly believed to be justified), and reckless behavior (a conscious disregard of a substantial and unjustifiable risk). In a Just Culture, management response is based on the behavior: human error is consoled (while searching for system contributions); at-risk behavior is coached to help individuals make better behavioral choices; punitive responses are reserved for reckless or repetitive behaviors. All players within the organization are placed within the same code of ethics. Values and expectations are communicated to staff so everyone knows to what code they will be held accountable.
• A culture in which enduring value and priority is placed on employees and on safety by everyone at every level of the organization. It exemplifies the extent to which individuals and groups will commit to personal responsibility for safety; act to preserve, enhance and communicate safety concerns; strive to actively learn, adapt and modify (both individual and organizational) behavior based on lessons learned from mistakes; and be rewarded in a manner consistent with these values.
• An environment in which communication is open & honest, where the emphasis is on “team” rather than “individual” and standards and practices are developed in a multidisciplinary framework. In a Just Culture, staff members are helpful and supportive of each other; staff trust each other; team members have a relationship emphasizing credibility and attentiveness; the environment is resilient. Each event improves patient care.
The inculcation of appropriate accountability into GHS’ culture is essential to improvement of patient safety and quality of care. We now embrace a different type of accountability: one that requires all employees to be transparent, accountable, and involved in the interests of safety. Not reporting the error, preventing the system and others from learning is now the “adverse outcome.”
I have had several people at GHS and in the community ask about the status of the University of South Carolina School of Medicine – Greenville. It reminded me of the deep interest and enthusiasm with which this issue is being followed in the community and the state. Our Vision is to “transform healthcare for the benefit of the people and communities we serve” and it is good for me to remember and communicate that vision. I continue to believe this will be clinically, academically and economically transformational for the Upstate. October is a big month and the next step on the road to having our first class start in the Fall of 2012. Finally, I am deeply grateful for Dr. Taylor’s shepherding of this process and I do not know how it could have happened without him.
The following email was sent out by Dr. Spence Taylor to our Board last week
The LCME Site Survey for USCSOM-Greenville ended this morning [last week] with an exit interview between leaders from USC/ GHS and the LCME Site Survey team.
This Site Survey officially culminates the USCSOM-Greenville Institutional Self-Study process for preliminary accreditation, which began in August 2010. The purpose of the Site Survey was to independently verify or refute the findings of the USCSOM-Greenville Institutional Self-Study Task Force, whose report was submitted to the LCME in April. The findings of the Site Survey team will be submitted to the LCME, where, in October, USCSOM-Greenville will be considered for preliminary accreditation.
The LCME ad hoc Site Survey team was chaired by Dr. John Fogarty, Dean of the Florida State University School of Medicine and also included Dr. Robert Hash from Texas A&M and LCME Secretariat, Dr. Barbara Barzansky. The team interviewed and met with over forty USC/ GHS administrative leaders, faculty and staff during the past four days. We believe that overall, the Site Survey went very smoothly and all USC/GHS participants performed with distinction.
I would like to personally thank everyone who has participated in the LCME preliminary accreditation process. I would particularly like to recognize Ms. Sandy Burns, our administrative coordinator, who received a commendation today from the Site Survey team for her outstanding organizational skills.
It has been an honor to co-chair the USCSOM-Greenville Institutional Self-Study Task Force.
With best regards,
Spence M. Taylor, M.D.
Co-Chair, Institutional Self-Study Task Force
University of South Carolina, School of Medicine-Greenville
We have twelve Trustees on the Board of Greenville Hospital System, each Trustee serves a six year term. Last week the Upstate Delegation chose four nominees submitted by the Hospital Board. The selection process is not really big news, we have been nominating board members to the delegation to select for decades. What is more interesting news is that all four selected by the Delegation are women – a first for us. The following individuals have been selected to serve six year terms as members of the GHS Board of Trustees: Ruth Richburg, Michelle Seaver, Lisa Stevens, and Marguerite Wyche.
So, what does that have to do with Converse College? It is just a matter of timing! A week or so before the decision was made for our Trustees, I had the opportunity to hear Betsy Fleming speak at a dinner about “Gender Gaps & Opportunities” and I have attached a copy of her talk. I think the diversity we have on the Board is a tremendous asset.
Gender Gaps & Opportunities
I grew up here in South Carolina. It is where I first developed my passion for the arts. I left in 1984 and returned—18 years later—first to Charleston for art and to share my passion and enthusiasm for the visual arts with the Lowcountry community as director of the Gibbes Museum of Art. My aspiration was to expand the value that Charlestonians and South Carolinians placed on creativity and the arts, and to connect people through creative expression.
It is my belief that Art provides a means to communicate and understand across cultural, social, economic, and language barriers. It is an important tool for building community capital.
However, with my return, I became painfully aware that the State of South Carolina was lacking in its support for women. We today rank at the bottom of all states in terms of women’s earnings, educational attainment, access to health insurance and political representation. We are at the top of the list in terms of women and children living in poverty.
There are currently no female senators in the South Carolina General Assembly and no elected woman representing our state on the national level—in Congress or Senate.
These gender gaps are especially surprising considering our state has such strong female legacies, which include:
-in the arts, Henrietta Johnston (born 1674 and passed 1729), America’s first pastel artist and earliest known female painter;
-Julia Mood Peterkin, only South Carolinian and the first woman to win Pulitzer Prize (Converse alumna);
-in entrepreneurship, Eliza Pinckney who was first to discover how to grow indigo;
-and in law and politics, Bessie Wesley Alderman, another Converse alumna who was graduated in 1904, a former Women’s Suffrage Movement leader; and one of the first two women ever elected as a delegate to the National Democratic Convention in 1920 just after women got the right to vote.
How had South Carolina come to establish such an inadequate profile of women? How was it that despite the strong historical examples we allowed such disadvantage to our daughters and mothers? How could we truly build community without proper engagement and development of over 50% of our human capital—our women and girls?
So, with these questions in mind, even though I returned to South Carolina for art, I have chosen to stay for women. And, I have discovered that the problems in South Carolina are challenges for our entire nation. I work today at Converse because I believe it matters that:
-Despite the fact that we have made important strides to address issues of gender equity and equality, 78 cents for every dollar does not represent equal pay for equal work.
-Because it matters that women comprise over 50% of the population in the United States but only 16% of our national representatives in Congress and Senate (and none are from SC).
-Because it matters that in corporate America today women make up approximately 50% of the workforce, but only 2.4% of the CEOs of Fortune 500 and 1000 companies, only 16% of the total number of top management executives and less than 15% of those individuals holding corporate Board seats. Despite a recent study demonstrating that Fortune 500 companies with female board members had a better return on equity by more than 50%.
-Because it matters that 75% of senior male executives have stay-at-home partners while 74% of senior female executives have a partner who works full time.
-Because it matters that women today hold only 18% of the top leadership positions—ranging from 7% in military to 39% of nonprofit top jobs
I take immense pride in my work as president of Converse College and the tremendous opportunities and advantages that go hand in hand with a Converse degree. Converse was the 15th women’s college founded in the United States (that number eventually grew to over 300) and one of only 50 remaining today. We are all about advancing women for personal and professional success.
My work is now to change—once and for all—the expectations of and for girls and women. As a role model and catalyst, I am committed to nurturing and empowering all girls and women to be and to become their best selves. I believe that our families and our communities deserve it.
Recent research on the impact of particular aspects of the collegiate experience on males and females identified significant differences tied to gender. Such gaps involve finances, career aspirations, self-confidence and leadership.
For example, 70% female first-year college students are significantly concerned about financing college as compared to only 57% of men. Over half of the women while only 36% of men expect to hold a job while in college. It’s hard to hold down a job and complete your academic work at the same time.
And yet, the females on average earn better grades and have a stronger academic orientation. More troubling, however, is that the men complete college with a higher level of self-confidence in academics, leadership, and career aspirations.
Student-faculty interactions were among the most influential factors impacting students’ self-esteem and motivation. While females who felt dismissed by a faculty member in a classroom reduced their longer-term academic aspirations, their confidence in math and their physical well-being, males simply got motivated and became more socially activist.
While there are clearly gender gaps in collegiate experiences and outcomes, there are also significant differences for women who attend different types of colleges.
In a recent study involving more than 10,000 interviews with female graduates of colleges and universities from 1970 to 1997 nationwide, women’s colleges scored higher than coed liberal arts colleges and public universities as being “extremely effective” in helping graduates to:
• Develop self-confidence and initiative
• Have a sense of purpose in life
• Develop moral principles that can guide actions
• Be politically and socially aware
• Think creatively
• Speak and write effectively
• Be prepared for their first job and for a career change or advance.
The study also showed that these women’s college graduates were not just self-confident leaders in the public arena, they also became mothers and wives at the same rate as those graduates of coed institutions. The study’s results indicate that women’s colleges are more successful than their coed counterparts—large and small—in helping a woman to develop as a whole person, ensuring personal and professional achievement, fulfillment and balance throughout her lifetime. These institutions are incubators for real-world success for women. While women’s colleges today cannot educate all women, we can and should take a bigger leadership role in helping to ensure that our coed institutions are equally attentive to male and female collegiate needs.
In a national report on student engagement, Converse students, as compared to their counterparts at other institutions, were twice as likely to rate their overall educational experience as “excellent,” twice as likely to discuss career plans with faculty, more than twice as likely to study abroad or attend a cultural event and more likely have serious conversations with students of a different race or ethnicity.
So, how does all this data translate into real life? Converse has incredible outcomes: 85%, 90%, 100% acceptance rates into law, medical and vet and pharmacy graduate schools. We draw young women from 24 states and 9 countries. We count among our alumnae numerous trailblazers and leaders including: a three-star Major General of the United States Army; the first woman elected to chair a School Board in South Carolina and the second African-American female jurist elected by the South Carolina legislature; a justice serving the Supreme Court of Texas; the head of Emory University’s pediatric cancer center; and many of the highest ranking executive women employed by such corporations as SCANA and Wachovia.
In light of our national statistics on the status of women and families, in light of the dearth of women participating in decision-making in the board room, the c-suite or Capital Hill, in light of what we know about women’s reticence to get involved in the political arena, when people ask me about the relevance of single gender education, or the place in today’s world for a Converse College, my answer is definitely yes. I then ask them: why they as individuals and we as Americans do not expect more for our daughters and sisters. There is a very real place for women’s colleges today, because we still have plenty of work to do to empower all girls and women to activate their confidence, competence and calling.
In a recent survey conducted by the American Association of University Women of 4th through 10th grade girls, most of the girls revealed that they could not look in a mirror and say “I’m pretty” or even, “I’m o.k.” By comparison, in a similar survey of boys, 60% of the boys said they were just fine with how they looked. In a recent issue of Cosmogirl, 40% of the teen girls polled said they did not think of themselves as leaders. Interestingly, our standard co-ed collegiate experiences are currently reinforcing, rather than negating, such states of mind for girls.
I am told that Oprah once said that women can have it all, just not at the same time. Having witnessed the capabilities of hundreds of Converse alumnae, one of whom is my mother, having been mentored by smart and savvy women in both academia and business, I do believe that women can have it all. Moreover, I think that to dissuade young women from that belief is doing them, this country and our world a disservice.
In her 2007 book, The Feminine Mistake (I highly recommend for your daughters) Leslie Bennett writes that she and millions of other working women provide ample proof that there are many different ways to have kids, maintain a challenging career and have a richly rewarding life. Earning money, being successful and fiscally independent not only make women feel great. The truth is that when women sacrifice their financial autonomy and gamble on dependency, most of those women eventually end up on the wrong side of the odds.
Such a state of mind is certainly where the world is heading. Consider these statistics:
Women in the United States today currently control 51.3% of wealth. And, women’s earning power is growing with 5% of all women (compared to 15% of all working men) in 2006 making more than $75,000. A small % but it almost doubled since 2000. Women today own 40% of the small-to-medium private businesses in this country, and those companies are growing at twice the rate of US firms as a whole. Women are responsible for 83% of all consumer purchases in US today—62% of new cars, 92% of vacations, 90% of food, 93% of over-the-counter pharmaceuticals; and 80% of healthcare spending. And yet, they are still devalued, underestimated, and underserved–82% of women feel misunderstood by investment managers; 74% by automakers, 66% by healthcare marketers and 59% by food marketers.
This disparity between males and females in the business and commercial world, in the political arena and in education is our challenge and our opportunity that must be actively addressed. There is no time to waste in changing expectations for women and girls in South Carolina and far beyond…because it matters for the well-being of our state, our nation and our world.
Thank you for having me and other women here today, and for breaking the gender barrier of this supper club!
Bennetts, Leslie, The Feminine Mistake: Are We Giving Up Too Much, 2007.
Dychtwald, Maddy, Influence: How Women’s Soaring Economic Power Will Transform
our World for the Better, 2010.
Sax, Linda J., Alexander W. Astin, and Helen S. Astin, The Gender Gap in College:
Maximizing the Development Potential of Women and Men, 2008.