Employee Attitudes:  Future Outlook

Glass half full. In a recent review of current retirement savings plan trends, Diversified Investment Advisors assembled an interesting mix of statistics*. As you can imagine there is a good deal of less than positive results. For instance, 3% of plan participants have stopped contributing to their plan in 2008 and more than 50% of employees anticipate working "in retirement" (meaning working at least part-time or delaying or even opting to not take retirement). In fact, nearly 37% of workers expect to work beyond age 70.

Now before you start thinking 'that's a pretty empty glass', consider that 1/4 of adults have started saving in a retirement account in the last 12 months; 50% more Americans are increasing their savings; and younger adults are more likely than older adults to be currently saving for retirement. While it's difficult to ignore the root-cause, these are positive trends and only time will tell if they will have lasting impact beyond the recession.

Which brings us to this week's question:

Has there been a noticeable change in participant contributions to your organization's retirement plans?  (Select the most significant tactic)

• Yes, increasing contributions / opting to participate
• No, contributions have decreased
• No change overall
• Not close enough to call
• Not applicable

*Managing Retirement Plans in a Dynamic Market, Diversified Investment Advisors May 2009.

Physician Relations

The latest AHA Rapid Response Survey titled The Economic Crisis: The Toll of Patients and Communities Hospitals Serve* (April 27, 2009) shows an overall increase in physicians seeking financial support from hospitals. Since September 2008, 65% of surveyed facilities reported increased requests. According to a 2008 study by physician recruiting firm Merritt Hawkins, "physicians are accepting employed positions with hospitals in order to avoid the hassles of private practice, which include high malpractice premiums and struggles for reimbursement."

Which brings us to this week's question:

How are changes in physician engagement adding to your increased expenses for your organization?  Please select the most appropriate response:

• Shifts/changes are NOT increasing expenses
• Employing more physicians
• Paying more for on-call and other services
• Investing in or buying interest in physician practices
• Providing added support or partnering arrangements for equipment purchases
• Other

AHA Trends * AHA 2009 Economic Crisis Report.pdf

Indicators

In every business sector there are always signs or certain indicators that the climate is changing, with similar patters that begin to evolve.

These may be external occurrences, such as the unemployment rate beginning to drop in your county, the housing market shifting or when the hospital across town begins a heavier ad rotation on the radio. Or these may be internal, such as your organization's labor costs to revenue ratio begin to rise (or fall).

After previous down cycles in 2001 and 1994, health care saw a significant increase in the number of employees delaying retirement during those down cycles only to quickly reverse those decisions once the financial pressures began to ease.

If you look at the demographics, nearly 20% of the total US workforce will be age 55 or older by the year 2012.*

Based on the age of the health care workforce and the severity of the current market the rebound effect of those "waiting it out" to take retirement could be significant - you may be able to expect as much as a 50-60% increase once the markets begin to turn.

Which brings us to this week's question:

What activities are taking place in your organization today to help alleviate the staffing shifts that will occur once the market begins to turn? Select the most significant tactic:

• Building depth in succession planning and stepping up training
• Identifying likely retirement candidates and other high risk defections among all staff
• Increasing your pool of likely candidates
• Implementing an employment branding campaign
• All of the above
• None of the above

_____________________________________________

* Mitra Toosi, "A Century of Change: The US Labor Force, 1950-2050," Monthly Labor Review, May 2002.

The 'Zombieconomy'*

Umair Haque of HarvardBusiness.org defines it as "affliction that occurs when businesses are unable or unwilling to make decisions to address the challenges that face them. It's comprised of self-defeating behaviors and focusing on the wrong forms of innovation or simply not thinking revolutionary when revolutionary is required."

He cites the recording industry's focus on music consumer lawsuits rather than making strategic moves that will bring them long-term viability. Or US auto makers and their union counterparts focusing on current state and failing to adequately plan for future markets. Moving away from a zombieconomy means we need leaders who are willing to test boundaries, make better decisions and redefine what value really is.

Turn this discussion to health care reform - are we focused on the right things? There are discussions focused on coverage, access, transparency, single payers, affordability, efficiency, quality, and the list goes on, but are we being revolutionary?

Do we have any real impact if all we address is alterations in the payer model or adding billions in technology to a system that may not be able to sustain these improvements long term - with no real systemic changes?

Which brings us to this week's question:

Do you think that meaningful and sustainable health care reform is on the horizon (next 2-4 years)? Select one of the following responses:

• There will be little to no significant changes or reforms (status quo)
• There will be significant changes and reforms
• We will see changes but no meaningful reform
• It is too soon to tell

_____________________________________________

* UMAIR HAQUE EDGE ECONOMY "IdeaCast: the Zombieconomy: Thursday, April 16, 2009

Succession Planning

Hospital CEO turnover is between 14-18%; hospital CEO tenure averages five years; and 67% of hospital CEOs are age 50 and over.* Yet, the Global Leadership Forecast 2008-2009 reports that less than 50% of organizations have succession planning processes at any levels.**

Moreover, the National Healthcare Leadership Index survey found that on a seven-point scale rating a succession planning process that includes talent management at all levels (not just the very senior positions), Fortune 100 companies averaged 6.7 and all other hospitals and health systems were at 4.2.***

Which brings us to this week's question:

How broad is your succession planning process? Select one of the following responses:

• C-suite only
• All senior leaders and managers
• Department heads and key clinical specialties
• All staff

____________________________________________________

*DDI World, Global Leadership Forecast 2008/2009, Ann Howard and Richard S. Wellins

**The Impact of Hospital CEO Turnover in U.S. Hospitals, prepared for ACHE by Amir A. Khaliq, Ph.D, Stephen L. Walston, Ph.D., FACHE, Department of Health Administration and Policy, University of Oklahoma, College of Public Health; David M. Thompson, Ph.D. Department of Biostatistics and Epidemiology, University of Oklahoma, College of Public Health, 2006.

***NCHL in collaboration with the National Research Corporation, 2008

Leadership Development

Seventy five percent (75%) of executives surveyed for the Global Leadership Forecast 2008/2009 identified improving or leveraging leadership talent as a top business priority. However, confidence in leaders has declined and most leaders are not satisfied with their organization's development offerings.

Moreover, leaders who move up the development ladder face special challenges as they transition from one level of responsibility to the next; and leaders indicated that with each step, the transition becomes harder. Yet, 46% of organizations provide no development support at all for leaders in transitions.

Which brings us to this week's question:

Aside from evaluating performance during mid-year and year-end reviews, what are you doing to cultivate leaders in your organization and accelerate high performers? Select one of the following responses:

• Identifying gaps in succession for the organization's senior executives and managers
• Identify key competencies related to organizational goals at each level
• Identifying high performers on a regular basis through a disciplined succession planning process
• Conduct assessments of leaders regularly to assess skills and readiness to make transitions
• Create development plans for new leaders and leaders in transition
• Utilize multiple selections listed above ____________________________________________________

Source: DDI World, Global Leadership Forecast 2008/2009, Ann Howard and Richard S. Wellins