Healthcare Transformation

Culture Change

Changing the culture of the healthcare industry is no easy task but progress is being made.

Think about the last time the leadership at your company announced a big change. Did you get onboard the first time you heard the presentation or did you have reservations? Most people have reservations especially if they haven’t been involved in understanding the issues and formulating the strategy supporting the change.

Many in the healthcare industry understand that the cost of care is increasing faster than the economy can support and that we need to be part of the solution. The challenge is that no one has had a clear picture of the future or a clear understanding of how it will impact them. Consequently, many have felt the same reservation as when a company tries to undergoes a culture change. Complicating the culture change required to support Accountable Care are past failures to integrate the healthcare system and sustain health maintenance organizations (HMOs). Many HMOs were not financially viable over the long term which makes many professionals wonder what is different this time. However, it is becoming more clear with the policy changes rolled out with the health exchanges.

The main difference are the incentives and penalties that are impacting everyone one way or another. There are only two levers left for insurers to play with to make coverage affordable. The two levers are the deductible and the out-of-pocket maximum. If insurance remains a requirement for all Americans, there will be more and more pressure on the healthcare system to figure out how to get the broader population to live healthier and to provide cheaper care.

The stages of a culture change make it easier to see the process underway towards achieving healthcare consumerism.

Getting Started
Change starts with establishing new behaviors. The Affordable Care Act gave the industry the incentives needed to start changing how providers work. Gone, in large part, are the paper charts. Most providers are using an information system referred to as an electronic medical record to capture and share medical information.

People outside of the industry probably forget what it was like when their industry first automated because it has been so long. I remember the first applications that we adopted for work paper documentation in public accounting and internal audit. We had similar gripes and issues with those systems as the providers have with the systems that are being implemented now. They slowed us down because they were difficult navigate and use. Given our tight deadlines, many opted to continue on paper rather than take the time needed to master the new flow.

The difference in healthcare is that most providers don’t have a choice. The penalties for not using an electronic medical record are too punitive for the organization so clinicians have to persevere and master the new workflows or persuade someone to replace the system.

Making Progress
Progress makes people happy. It is hard to measure the mood of an industry but happy might be a stretch at this point. There seems to be more of an acceptance for the new methods and processes of documentation. Clinicians are finding ways to deal with the negative affect on their time at least in the short run while the rest of us scramble to develop solutions that make it easier for them to get their job done and provide meaningful insights about patient populations.

The other factor contributing to our progress as an industry is the constant messaging from our political leaders about the importance and need to achieve affordable care. That constant messaging is in essence teaching us a new language. Words like value, accountable care, lean, electronic medical records, health information, big data are becoming part of our everyday language. The mindset of healthcare consumerism is reinforced as more people learn the language and use it in their every day conversations.

Earning Support
When you tell people your goal and they can see your commitment you will get the support needed to achieve it.  I can honestly say that having people rally around you in support of your goal is one of the most inspiring and rewarding experiences that I have ever felt. How this level of support manifests in the industry is yet to be determined. However, it all has to start with the individual whether you want to refer to them as a patient or a healthcare consumer.

The patient engagement systems that reward individuals for healthy behavior offer potential. The systems now are essentially rewarding and encouraging healthy people for doing what they already find personally rewarding. To really impact the cost of care we have to figure out how to engage the people that would benefit the most and get them on the path to healthy living. While we might be looking for the “silver bullet” as we routinely do when faced with a big challenge the solution is probably multifaceted. Whatever the right solution is for the individual, healthcare providers are in the best position to keep their patients engaged in the journey that will reward us all.

“Change is hard because people overestimate the value of what they have—and underestimate the value of what they may gain by giving that up.”

James Belasco and Ralph Stayer
Flight of the Buffalo (1994)

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She has successfully led the transformation of ASCs and hospitals, helped technology and device companies with product and customer development and advised other professional firms on transactions.

Build Customer Focus

Most healthcare provider organizations operate with a weak matrix structure meaning the matrix is titled away from the cross functional teams or in other words, the organization is tilted away from the customer and towards the functional departments.  A functional structure helps develop expertise, systems and processes needed to enable staff do a specific job well according to industry metrics but are weak structures for promoting collaboration and enhancing customer focus.

I started thinking more about organizational structure while serving as an interim service line manager for a prominent hospital.  The role of service line managers differs slightly from organization to organization but the main purpose of the position is to help build the service line.  The challenge is that few service line leaders have direct support.  Most manage from the middle with influence as their main method to get the information and resources needed to do their jobs well done.  Granted influencing others is an essential skill for any manager but influence alone can limit management effectiveness especially in a weak matrix structure.

Leading companies use the customer’s voice to align the organization, foster teamwork and create products that meet the customer needs.  Most have adopted a matrix structure and assigned people from functional departments to cross functional teams responsible for managing products.  Moving more expertise to the front lines gives the product managers the timely support needed to solve problems, develop solutions, create new products and enhance service.

What if we used the matrix structure to move support from the functional departments to the service lines?  Would it help foster the collaboration needed to improve outcomes, reduce costs and/or enhance the patient experience?

There are challenges with every organizational structure and this one is no different.  Studies of cross functional teams have reported 75% are dysfunctional.  Getting people to work together is no easy task.  However, there are a few learnings from leading companies that can help make cross functional teams more successful in any organization.

Support: Functional managers need to support the cross functional teams.  The functional managers need to evolve their method of monitoring, developing and supporting their people working outside the department.

People: Functional managers need to assign people who have the knowledge and experience to contribute to the cross functional team and the people assigned need to be open to working with others that think differently than them.

Rewards: Functional managers need to be rewarded for supporting the cross functional team and the success of the team.  Broader metrics that reflect the company goals should be more heavily weighted in their compensation structure.

“Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.”

– Peter Drucker

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She has successfully led the transformation of ASCs and hospitals, helped technology and device companies with product and customer development and advised other professional firms on transactions.

Scale Up Excellence

Change is hard for people because it disrupts our routines and creates uncertainty in our lives.  If we had a choice most of us would rather not change unless the pain of what we are currently doing is so great that there is no other choice.

Leading companies and organizations have found ways to “scale up excellence” or in other words implement change that make it fun and rewarding for those involved.  It requires a little more creativity from leaders but it is worth the effort.

What if the principles for scaling up excellence could make all the change underway in the healthcare industry seem easy and fun.

Three of the seven principles for scaling up excellence are summarized below with some examples to inspire the way you approach change.

1. Link hot causes to cool solutions

The first step is to spark emotion of fear or anger with a catchy slogan supporting the need and/or goal for change.  My favorite slogan was used to ignite the competitive spirit within an oil company trying to win market share from Shell.  Every decision made had to be justified in context to how it would help the company “Slam the Clam”.

Could you imagine that kind of energy behind a healthcare initiative?  The IHI save lives campaigns are a good example of the type of messaging needed.  The campaigns are easy to understand, measurable and are actionable by all providers.  Who wouldn’t want to be apart of an initiative to save 100,000 lives?

What if we reframed the need for change in healthcare to what good health feels like and means to individuals and the nation rather than talking about the threat to Medicare and the triple aim.  Would you be more inspired to do your part if there was something meaningful in it for you?

2. Make information easy to digest

The second step is to make information easy to digest and act on.  This is particularly important as more data is made available to the industry.  Studies have shown that people make poor decisions when they have too much to process.  IHI was one of the leading organizations that understood the challenge of cognitive overload.  When they asked for help to save the lives of pneumonia patients they asked providers to do one thing.  Keep the bed of patients with pneumonia at 45 degrees.  Rather than burdening nurses with an additional task, IHI suggested using a simple cue.  They asked providers to paint a line on the wall so that everyone could easily see the measurement and adjust the bed as needed.

To achieve this level of simplicity, healthcare companies need to understand what is most important to those they serve in terms of health risks and preferences.  The Joie de Vivre hotel chain uses magazines as a way to define their target customer so that hotels offer the right services and have the right amenities.  Having a clear understanding of the customer enables the management team to monitor performance with just five measurements specific to each hotel.

What if the healthcare industry could make it that easy for people to measure success.  Would you be more engaged if you easily link your contribution to the bigger goal?

 3. Use incentives as the juice

The right rewards are an important part of change.  Both pride and shame have been shown to be effective at acknowledging, reinforcing and changing behavior more than annual increases.  One leading company decided to turn the checkbook over to their customers.  Passengers of Southwest were given a checkbook prior to the flight and where instructed to use them to acknowledge the flight crew.  The rewards were smaller than an annual raise but more effective because there was a direct link to positive behaviors valued by passengers.

Another industry leader used shame to improve timely attendance of meetings.  People arriving late to meetings or engaging in other behaviors that were thought to be disrespectful by the meeting organizer such as taking calls or checking email had to pay $10.  People attending the meetings could afford to pay the $10 but were more ashamed of being called out for their “bad” behavior.  The repeat offenders started showing up on time and paid attention during meetings.

What if patients were given checkbooks to reward those that cared for them or if shame was used in a more playful way to change bad or less than desirable behaviors.  Would you be more customer focused and mindful of your behavior?

Graphic: Courtesy of Idea Champions

About the Author: 
Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She has successfully led the transformation of ASCs and hospitals, helped technology and device companies with product and customer development and advised other professional firms on transactions.

Think Win Win

Three steps to integrate the healthcare system

If your job is outside the sphere of managing supplies and inventory like mine you probably don’t spend much time thinking about supply chain management.  I wasn’t either until I heard a lecture on the topic that made me think about it in a broader context.  What I concluded is that the entire healthcare industry could be described as just a complex supply chain with countless smaller supply chains functioning within it.

If you’re not familiar with the term or concept of a supply chain it is simply a term used to describe the nature of a relationship when two or more organizations, companies or individuals work together to develop a product or deliver a service.  The complexity of the supply chain increases with the complexity of the product or service and the number of companies involved.

The broadest chain in the healthcare industry is the healthcare delivery supply chain consisting of the payers and providers working together to provide healthcare services.  The complexity of the healthcare delivery supply chain comes from the nature of the service and the number of providers involved.  Managing a supply chain this complex would be a challenge for most companies even industries leaders.  However, some of the principles and best practices used in other industries by leading companies offers some insights into the problems with the current healthcare system and the initiatives underway to integrate the system so that it feels less “broken” to those that use it.

The basic principles and best practices of supply chain management:

 1. The weakest link defines the chain.
Best Practices: Information sharing and knowledge exchange

When most think about the weakest link it is usually a company that underperforms and causes a bigger system to fail.  However, the weakest link in the healthcare delivery supply chain is not one weak link but rather the lack of links connecting  payers and providers.  Other industries have found that errors happen and costs increase when everyone involved in the development or delivery of a product or service is not kept informed throughout the duration of the project.

The healthcare industry is heading the right direction with the initiatives underway to automate medical records and to establish standards that will facilitate the exchange and sharing of information.  However, more needs to be done before we can check the best practice box for information sharing and knowledge exchange.  This may account for why some healthcare executives are reluctant to jump onboard with other changes to integrate the system.

2. The customer requirements drive the supply chain integration.
Best Practices: Decision delegation, joint planning and collaborative design

As companies increasingly rely on third party suppliers to help develop their products and deliver services the need to collaborate and integrate with suppliers increases.  Studies have shown that leading companies that closely collaborate with their suppliers outperform comparative companies.  The right suppliers can provide a strategic advantage if they have the ability to adjust their operations to changing market conditions.

The challenge is healthcare is that most payers and providers operate on a transactional or fee for service basis and few acknowledge the existence of healthcare delivery supply chain.  However, the entire system would benefit if payers and providers embraced the relationship and worked collaboratively to eliminate redundant systems and streamline the processes necessary to enable providers to be more responsive to their markets.

3. A win-win relationship has to be the cornerstone of supply chain success.
Best Practices: Shared extended performance measures, risk/cost/gain sharing

It might seem counter intuitive to think win-win when the industry is under pressure to cut costs but it can work.  Leading companies in other industries under pressure to make their products more affordable in increasingly competitive markets and have found that partnering with their suppliers can make them more competitive.

Partnering is an extension of a relationship that enables the parties involved to share in the risks and rewards.  As an industry we are exploring the use of more integrated models again such as Accountable Care Organizations (ACOs) to finance and deliver care.  The main challenge of this type of integration is the industry talk of winners and losers.  Change will be hard won unless we develop win-win solutions that strike the right balance of risks and rewards.  To achieve the right balance we need to be looking at broader metrics for the system to understand the impact of the changes and to ensure the system is meeting the needs and expectations of patients.

About the Author: 
Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She has successfully led the transformation of ASCs and hospitals, helped technology and device companies with product and customer development and advised other professional firms on transactions.