Month: October 2008

Organize around the patient

Vineet Nayar at Inverted Wisdom (a Harvard Business Publishing blog) asks an intriguing question:

As time passes by, people and things change. Now, what if time passes by and people change, but things that should change, don’t?

Health care is steeped in tradition.  While other businesses have flattened their organizational structures and empowered front-line workers, on the whole health care has grown more bureaucratic.  Actually, health care has approached this issue in an almost completely opposite fashion.  Remember the empowered country doctor?  I don’t either, but I have read that they existed at one time.

Mr. Nayar continues:

It is not a stationary relic I’m talking about. I’m talking about the brand new dinosaur on the block – the classical management pyramid. Time has come to dismantle it and adapt to a new evolutionary and unstructured model that leverages the team effect to ensure that companies can lead change rather play catch up or be left behind.

The prevailing notion is that health care is constantly changing, that’s true.  But backward incentives have mucked up our ability to respond.  The reality is that the majority of stakeholders in our industry have become reactive to change instead of leading it.

Again, Mr. Nayar:

Yes, the traditional pyramid management structure needs some unstructuring. Flexibility is the key to survival in the 21st century, and organizational structure is no exception. It needs to be open to change, to take any shape that’s best suited to the organization.

Leadership would do well to shun the ‘Me’ approach and deregulate, decentralize and transfer a substantial part of the organizational control to the frontline.

Logically, the health care organizational structure should be devised so that the complete focus is on the patient’s needs.  The Cleveland Clinic is trying by integrating its service lines into institutes dedicated to health care conditions.  Cleveland Clinic CEO Dr. Toby Cosgrove:

I think the model where we bring together all the expertise (cardiologists and surgeons under one roof, for example) will be a tremendous benefit for clinical care. You get wonderful things from proximity (conversation and innovation). The line between medicine and surgery is blurring. Innovation takes place on the borders of disciplines.

Delivering health care requires a tremendous amount of organization.  The complexities of this industry (uber regulation, 24/7/365 operation, numerous specialties, etc.) make it difficult for executives to let go of their control.  But the complexities also make it that much more important that control is released to the talented workers on the front line. Mr. Nayar:

Simple as it may sound, the truth is that this is a very tough task. The question we must ask ourselves is whether we have within ourselves the fortitude to deconstruct the traditional power centres so that more emphasis is placed on the troops instead of the General.

Difficult it is, but necessary.  Quality would improve if it were released to the people who truly understand quality and can provide it its necessary attention.  Technology may reach its full potential if the people who use that technology become the decision makers on implementation.  Services would benefit the patient if we organized around the patient’s health care needs.  We need to stop building barriers and start tearing them down.

We should organize around collaboration and continuity and integration.

Maggie Mahar at Health Beat Blog recently wrote about the high level of care delivered at the Mayo Clinic and the power of integrated delivery systems:

The variation suggests that it may not be the Mayo “system” that lifts Mayo’s flagship Minnesota hospital above the tide. Rather, some observers suggest, it may be the highly egalitarians and collaborative “culture,” which puts patients ahead of everything and everyone else, that makes the Mayo Clinic in Rochester, Minnesota so special.

Nevertheless, the 2008 Dartmouth Atlas does provide sufficient data to support the thesis that integrated delivery systems are likely to provide the most efficient high-quality care. And the report makes it clear that Mayo is not the only integrated system that stands as a benchmark for excellent collaborative care. Both Intermountain Healthcare (IHC) in Utah and the Sutter system hospitals in Sacramento are singled out for praise.

One last time, Mr. Nayar:

So, do we have the vision to look upon our organizations as collaborative and evolutionary life forms that must keep changing along with the marketplace? Do we have the humility to step out of our egos and hand over the mike to our subordinates? Do we possess the courage to unstructure an existing, rigid regime that we have known to work in the past?

We often accept the verdict of the past and slumber into the cushioned inertia of best practices, until the need for change cries out loudly enough to stir us out of our comfort zones. It is time.

Embrace change, lead change.  It is time, indeed.

The Truth About Costs

Bob Laszewski at Health Care Policy and Marketplace Review highlights a recently released Robert Wood Johnson Foundation Synthesis Project report authored by Paul Ginsburg from the Center for Studying Health System Change.

“High and Rising Health Care Costs: Demystifying U.S. Health Care Spending” is very interesting reading.  This especially:

If the efficiency of the delivery of services could by increased by 20% over 10 years, this would roughly close the gap between health care spending and GDP over that period.

Mr. Laszewski explains:

The bottom line is that if we want to contain our health care costs we need to find productivity improvement in things like technology use, treatment patterns, and administrative overhead.

…

The big-ticket play is in productivity—the more discriminate use of medical technology, consistently practicing outcomes-based medicine, and reductions in system overhead particularly in the insurance system.

Show them the money

The hope is that this credit crunch is a short-term pain.  No one knows, of course.  Anything longer than what experts consider short-term may ignite a perfect storm with massive consequences to the health care industry.

From The New York Times:

Tight credit is adding to a financial challenge that some hospitals are already facing, as greater numbers of patients are unable to afford the rising out-of-pocket portions of their medical bills or lack insurance altogether. Many hospitals say they are already seeing an increase in their bad debt — money they bill patients for but cannot collect.

And that problem could get worse, as people worry first about paying their mortgages and credit card bills before dealing with their medical bills, said Gary Taylor, a hospital analyst at Citi Investment Research. “We’re worrying about collection rates falling,” he said.

Whoa, Detroit is cheap, probably spells doom for hospitals

Directly below this post is a link to a story from The Wall Street Journal that describes the plight of an urban Detroit hospital.

The Detroit Free Press outlines what may be one of the contributing factors (via Richard Florida):

Driven down by sales of foreclosed homes, median sale prices fell 34% in metro Detroit in September compared with a year ago, dipping below $10,000 in the city of Detroit.

The median price on a house or condo sold in Detroit last month plummeted 57%, to $9,250, from $21,250 a year ago, according to figures released Monday by Realcomp, a multiple listing service based in Farmington Hills.

Reaction: !

More of the same…

The Wall Street Journal on the sad, sickening reality of unprofitable hospitals.  The situation is only going to get worse as hospitals who have come to rely on investments to supplement operating margins no longer can.

Best line: “Shutting down unprofitable operations and expanding profitable ones is a common business, but nonprofit hospital systems aren’t ordinary businesses.”

The Right-Brainers shall save us

Dan Pink highlights a recent Barron’s interview with Jeremy Grantham—he was one of the first to warn of a credit crisis a few years ago.  Mr. Grantham explains what got us into this fix (italics added):

I ask myself, “Why is it that several dozen people saw this crisis coming for years?” I described it as being like watching a train wreck in very slow motion. It seemed so inevitable and so merciless, and yet the bosses of Merrill Lynch and Citi and even [U.S. Treasury Secretary] Hank Paulson and [Fed Chairman Ben] Bernanke — none of them seemed to see it coming.

I have a theory that people who find themselves running major-league companies are real organization-management types who focus on what they are doing this quarter or this annual budget. They are somewhat impatient, and focused on the present. Seeing these things requires more people with a historical perspective who are more thoughtful and more right-brained — but we end up with an army of left-brained immediate doers.

So it’s more or less guaranteed that every time we get an outlying, obscure event that has never happened before in history, they are always going to miss it. And the three or four-dozen-odd characters screaming about it are always going to be ignored.

If you look at the people who have been screaming about impending doom, and you added all of those several dozen people together, I don’t suppose that collectively they could run a single firm without dragging it into bankruptcy in two weeks. They are just a different kind of person.

So we kept putting organization people — people who can influence and persuade and cajole — into top jobs that once-in-a-blue-moon take great creativity and historical insight. But they don’t have those skills.

It reminds me of micro-level health care thinking.  So if you don’t have any creatives/weird ones/right-brainers in your c-suite, the opportunity is now upon.  Black swans happen.  How is your management team dealing with the reality of (significantly more) difficult health care times ahead?  Diversity is a start (read: people that think differently than you!).

35. Ask the patients!

Patient satisfaction is all the rave in health care.

Ahem, finally.

PSFK brings news of Best Buy’s effort to incorporate customer wants into its products:

The giant electronics retailer has been working on a program that actively incorporates customer feedback into the design process of future products. The “Blue Label” line features notebook computers from Toshiba and HP that come with ideas sourced from Best Buy client input.

…

It’s great to see a large cooperation like Best Buy being flexible, responsive and actually paying attention to the real needs of people.

It certainly is great.  The real needs of people. Hospitals should be doing the same thing.  Start a Patient Experience Force today.  Not a task force, a force: a group of patients (past and present) tasked with making your hospital’s experience the best it can be.

From I4U News:

“As the leading consumer electronics retailer, Best Buy has millions of interactions with consumers each year. We listened to our customers and learned that they wanted more from the feature set on available laptops so we went directly to manufacturers to fix that,” said Wendy Fritz, senior vice president of computing, Best Buy.

Why can’t hospitals replicate such a program for its services?  They can, and should.

Ask the Force everything.  Experiences with parking, navigating your facilities, interactions with physicians and employees, services offered, billing…etc.

Oh, and then exploit their opinions to make your health care facility better.  It’s that simple.

Principle #35: We will involve patients in all of our patient experience decision making (which, by the way, is almost all of them).

Hero redux: Innovate!

You may have read this.

Here’s more:

Memorial Hospital and Health System of South Bend, Indiana is celebrating a long string of successes at building innovation and R&D into day-to-day operations. Hospital CEO Phil Newbold explains, “Healthcare is one of the only industries left that hasn’t embraced innovation. Yet it can lead to improved patient compliance and outcomes. Our ultimate goal is for our surrounding community to become the healthiest in America. Building a team of innovative problem solvers at Memorial is the key.”

They even utilize the Tom Peters WOW Project methodology.

Ahhh, heaven on Earth.