12 takeaways from the 2018 JP Morgan Healthcare Conference

https://www.beckershospitalreview.com/hospital-management-administration/12-things-you-need-to-know-from-the-2018-jp-morgan-healthcare-conference-while-the-destination-is-uncertain-the-direction-is-clear.html

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The recent breathtaking flurry of mega-mergers coupled with increasingly challenging market forces and an ever shifting political landscape has cast a cloud of confusion regarding where the U.S. healthcare delivery system is heading.

So, where do you go to find the map?

Every year, the JP Morgan Healthcare Conference provides an incredibly efficient snapshot of the strategies for large healthcare delivery systems, the hub for healthcare in the U.S. Most of these organizations are also the largest employers in their respective states. The conference took place this week in San Francisco with over 20 healthcare systems presenting, including Advocate Health Care, Aurora Health Care, Baylor Scott & White Health, Catholic Health Initiatives, Cleveland Clinic, Geisinger Health System, Hospital for Special Surgery, Intermountain Healthcare, Mercy Health in Ohio, Northwell Health, Northwestern Medicine, Partners HealthCare System, WakeMed Health & Hospitals and many of the other big name brands in the market. Each provided their strategic roadmap in a series of 25-minute presentations from their “C” suite. If you’re looking for the GPS on strategy and a gauge on the health of healthcare, this is it.

How do their strategies differ? What direction are they heading in? There is a great line from Alice in Wonderland that goes, “If you don’t know where you’re going, any road will take you there.” You would think that line applies perfectly to the U.S healthcare system, but the good news is it actually doesn’t.

While the exact destination for everyone is TBD, the direction they are heading in is actually pretty clear and consistent. It turns out that they are all using a very similar compass, which is sending them down a similar path.

So, what are the roadside stops health systems consider absolutely necessary to be part of their journey to creating a more viable and sustainable value-based business model?

Based on the travel plans for over 20 of the largest and most prestigious healthcare delivery systems in the country, here’s your GPS and list of 12 things you “must do” on your journey.

1. You Must Scale

Clearly the headline at #JPM18 was the flurry of major announcements regarding major mergers. With that said, two of the mergers were front and center: teams were there to present from Downers Grove, Ill.-based Advocate and Milwaukee-based Aurora, which will be a $10 billion organization with 70,000 employees, as well as San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives, which will be a $28 billion organization with 160,000 employees. The size and scale of these mergers is pretty stunning. While the announcement of these and the other recent mega-mergers has forced many into their board room to determine what the deals mean to them, the consensus at the conference was this: There are a number of different paths forward to achieve scale. Some, like Baylor Scott & White in Texas, have aggressive regional expansion plans. Others are betting on partnerships to provide the same or even more value. Taking a pulse of the room, two things were clear. The first is there is no definition of scale any more in this market. The second is that, despite this flurry of mergers, “getting really big” is not the only destination.

2. You Must Pursue “Smart Growth” and Find New Revenue Streams

Running counter to the merger narrative in the market, Salt Lake City-based Intermountain provided a good overview of the movement to what is called an “asset light” strategy of “smart growth.” This is a radically contrarian approach to the industry norm, which is the capital intensive bricks and mortar playbook of buying and building. As part of their strategy, Intermountain will open a “virtual hospital” delivering provider consultations and remote patient monitoring via telehealth. The system will also launch a number of healthcare companies every year, leveraging their considerable resources in a manner they believe will produce a higher yield. Other health systems outlined a similar stream of initiatives they have in motion to diversify their revenue streams and expand their business model into higher margin, higher growth businesses. One example is Cincinnati-based Mercy Health, which achieved strong growth and leverage via their investment in a revenue cycle management company. Advocate in Illinois formed a partnership with Walgreens. Together, they now operating 56 retail clinics and Advocate has made a significant impact on driving new patients and downstream revenue to their system. The bottom line is all now recognize that they must think and act differently to be able to continue to fund their clinical mission and serve their community.

3. You Must Measure and Manage Cost and Margins

While some are moving aggressively to get scale, everyone is looking to more effectively use the resources they have and get more operating leverage. Margin compression was a consistent theme, with many systems now moving into consistent, stable operating models around managing margins versus launching reactionary initiatives when they find a budget gap. What is emerging is a new discipline and continuous process around managing cost and margins that is starting to look similar to the level of sophistication we have seen in the past for revenue cycle management. To that end, there has been major movement in the market to implement advanced cost accounting systems, often referred to as financial decision support, which provide accurate and actionable information on cost and help organizations understand their true margins as they take on risk-based, capitated contracts. Some during the conference referred to it as the “killer app” for the financial side of driving value. Regardless of what you call it, all are moving aggressively to understand the denominator of their value equation.

4. You Must Become a Brand

Investing in and better leveraging their brand has become a strategic must for health systems. The level of sophistication is growing here as providers shift their mental model to viewing patients as “consumers.” Aurorain Wisconsin cited their dedicated Consumer Insights Group and outlined their “best people, best brand, best value” approach that has been incredibly effective both internally and externally. At the same time, the bigger investments for many health systems relative to brand are more on brand experience than brand image, with a focus on understanding and radically rethinking the consumer experience. As an example, at Danville, Pa.-based Geisinger, close to 50 percent of ambulatory appointments are scheduled and seen on the same day. And every health system is making meaningful investments in their “digital handshake” with consumer, creating and leveraging it via telehealth as well as mobile applications to enhance the customer experience.

5. You Must Operate as a System, Not Just Call Yourself One

One clear theme at #JPM18 is different organizations were at different points along the continuum of truly operating as a system vs. merely sharing a name and a logo. There are a number of reasons for this, but you are increasingly seeing tough decisions actually being made vs. just kicking the can down the road. There has been a great deal of acquisitions over the last few years coupled with a new wave of thinking relative to integration that is more aggressive and more forward-looking. This mental shift is actually a very big deal and perhaps the most important new trend. Many health systems are heavily investing in leadership development deep into their organization to drive changes much faster.

6. You Must Act Small

The word “agile” is quickly becoming part of everyone’s narrative with health systems looking to adopt the principles and processes leveraged in high tech. Chicago-based Northwestern Medicine is an example of an organization that has grown dramatically in the last five years, now approaching $5 billion in revenue. At the same time, they have still found a way to operate small, leveraging daily huddles across the organization to drive their results. The team at Raleigh, N.C.-based WakeMed has achieved a dramatic financial turnaround over the last few years, applying a similar level of rigor yielding major operational improvements in surgical, pharmacy and emergency services that have translated into better bottom line results.

7. You Must Engage Your Physicians

Employee engagement was a major theme in many of the presentations. With the level of change required both now and in the future, a true focus on culture is now clearly top of mind and a strategic must for high-performing health systems. That said, only a handful articulated a focus on monitoring and measuring physician engagement. This appears to be a major miss, given that physicians make roughly 80 percent of the decisions on care that take place and, therefore, control 80 percent of the spend. One data point that stood out was a 117 percent improvement in physician engagement at Northwestern. Major improvements will require clinical leadership and a true partnership with physicians.

8. You Must Leverage Analytics

Many have reached their initial destination of deploying a single clinical record, only to find that their journey isn’t over. While health systems have made major investments big data, machine learning and artificial intelligence, there was a consistent theme regarding the need to bring clinical and financial data together to truly understand value. Part of this path is the consolidation of systems that is now needed on the financial side of the house with a focus on deploying a single platform for financial planning, analytics and performance. The primary focus is to translate analytics not just into insights, but action.

9. You Must Protect Yourself

As organizations move deeper into data, there is increased recognition that cybersecurity is a major risk. Over 40 percent of all data breaches that occur happen in healthcare. During the keynote, JP Morgan Chase CEO Jamie Dimon shared that his organization will spend $700 million protecting itself and their customers this year. Investments in cybersecurity will continue to ramp up due to both the operational and reputational risk involved. Cybersecurity has become a board room issue and a top-of-mind initiative for executive teams at every health delivery system.

10. You Must Manage Social Determinants of Health in the Communities You Serve

Perhaps the most encouraging theme for healthcare provider organizations was the need to engage the community they serve and focus on social determinants of health. As Intermountain shared: “Zip code is more important than genetic code.” To that end, Geisinger refers to their focus on “ZNA.” They have deployed community health assistants, non-licensed workers who work on social determinants of health and have implemented a “Fresh Food Farmacy,” yielding a 20 percent decrease in hemoglobin A1c levels along with a 78 percent decrease in cost. Organizations like ProMedica Health System in Ohio have seen similar results with their focus on hunger in Toledo. WakeMed has an initiative focused on vulnerable populations in underserved communities that has resulted in a significant decrease in ER visits and admissions and over $6 million in savings.

11. You Must Help Solve the Opioid Epidemic

The opioid issue is one that healthcare professionals take very personally and feel responsible for solving. It came up in virtually in every presentation, and it’s an emotional issue for the leaders of each organization. This is good news, but the better news is that they are taking action. As an example, Geisinger invested in a CleanState Medicaid member pilot that resulted in a 23 percent decrease in ER visits and 35 percent decrease in medical spending, breaking even on their investment in less than 10 months. While many would rightly argue that the economic rationalization isn’t needed for something this important, the fact that it’s there should eliminate any excuse for anyone not taking action.

12. You Must Deliver Value

The Hospital for Special Surgery in New York is the largest orthopedics shop in the U.S. and a great example of how value-based care delivery is taking shape. Perhaps the most revealing stat they shared is that 36 percent of the time, patients receive a non-surgical recommendation when they are referred to one of their providers for a second opinion. This is exactly the type of value-based counseling and decision-making that will help flip the model of healthcare. Some systems are farther along than others. Northwestern currently has 25 percent of its patients in value-based agreements, but other systems have less. As the team from Intermountain re-stated to this audience this year, “You can’t time the market on value, you should always do the right thing, right now.” Well said.

It’s time to get started or get moving even faster.

As the saying goes, “It’s the journey, not the destination.”

Happy trails.

Broward Health counter-sues former CEO: 5 things to know

https://www.beckershospitalreview.com/legal-regulatory-issues/broward-health-counter-sues-former-ceo-5-things-to-know.html

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Fort Lauderdale, Fla.-based Broward Health’s ex-CEO Pauline Grant sued her former employer in December 2016. The health system fired back in a counter-suit filed Dec. 1, alleging Ms. Grant violated the Anti-Kickback Statute.

Here are five things to know about the litigation.

1. North Broward Hospital District, which does business as Broward Health, claims Ms. Grant violated the system’s code of conduct by serving as secretary of the board of directors of a long-term care provider that had contracts with Broward Health, according to the Sun Sentinel.

2. The health system alleges Ms. Grant’s position on the board violated the terms of a corporate integrity agreement the hospital district entered into with the federal government in 2015. The agreement was put into place after Broward Health paid $69.5 million in September 2015 to settle allegations it violated the False Claims Act by holding improper financial relationships with physicians.

3. Broward Health also claims Ms. Grant violated the Anti-Kickback Statute while she was CEO of Broward Health North in Deerfield Beach, Fla., one of the health system’s six hospitals.

4. Broward Health’s board voted 4-1 on Dec. 1, 2016, to fire Ms. Grant. The board voted to remove Ms. Grant from her position after an independent counsel review showed potential violations of the Anti-Kickback Statute. A subsequent independent investigation found Ms. Grant “ran afoul” of federal anti-kickback law when awarding emergency room contracts to orthopedic physicians seeking to participate in Broward Health North’s on-call emergency department rotation.

5. Following her ouster, Ms. Grant sued Broward Health, accusing the system’s general counsel and four board members of violating the Florida open-meetings law to bring about her termination.

 

How do you ‘hire’ (and manage) an interim executive?

https://interimcfo.wordpress.com/2017/10/29/how-do-you-hire-and-manage-an-interim-executive/

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Abstract:  This article is about the optimum relationship between an interim executive and their client.  It has been a while since I wrote on Interim Executive Services.  In this article,  I  return to the primary topic of this blog.

What is the difference between interviewing and hiring an interim vs. an employee?

First of all, it is not in your best interest to ‘hire’ an interim.

If the interim is furnished though a firm, they are more than likely paid on a W-2 and you are not technically ‘hiring’ the interim, you are engaging or entering a contact with their firm.  The interim is ’employed’ by the firm and not you.  Employed is loosely used in this case because while the interim may be on a W-2 program with their firm, the only time they are paid is if they’re producing billable revenue. Sadly for the interim, they get to bear all of the disadvantages of being paid by W-2 while consulting without having the ability to reap any of the benefits of being an independent expert.

Now assume that you are smart enough and lucky enough to source the perfect independent or free lance interim directly, what then?

Congratulations, you are probably well on your way to having a far superior resource that will  be highly motivated to address your situation without the interference of a third party that in my experience, adds little if any value beyond sourcing the interim.  If you have experience with this, you know what I’m talking about.  When was the last time you saw anyone from the interim firm you engaged other your interim?

With a free agent, you will be contracting with the Interim or a company (LLC or S-4 Corporation) they own.  Legally, you are dealing with a sole proprietor in most cases regardless of whether their corporate entity is involved or not.  For this reason and depending upon the circumstances, you might want to get their personal guarantee of their firm’s performance.

I have a S-4 Corporation that I can use for contracting.  The problem for me is that if I bill though my corporation, I am obliged to pay the federal government 9% of my earnings in the form of federal unemployment tax or FUTA that I can never claim because as an independent consultant, I cannot be ‘laid off’ so I am ineligible to receive FUTA.  Don’t get me started.  I have been fortunate that my clients have agreed to engage me directly and individually.  A corporate structure when dealing with a sole provider affords disproportionate list to the provider.

What about insurance?  Increasingly, client firms are requesting or requiring professional liability insurance.  Setting aside the fact that I have never seen a claim against a professional liability policy for interim services, I have been successful in convincing my clients to name me under their Directors and Officer’s Insurance (D&O) coverage if I as an interim am going to be authorized to execute documents and take actions on behalf of my client.  To me, this makes more sense for the client because if I am required to obtain insurance that will most likely be less robust than the organization’s D&O coverage, that cost is going to be passed along and in effect, the client will be paying twice for the same coverage.  Not only that, in the event of a problem, you are more than likely going to be drawn into a subrogation fight.  If I have no authority and I am not going to be executing documents, i.e., I am engaged to do project work, then liability insurance should be a non-issue.

In another article, I talk about how to find interim executives.

If you have found the ‘perfect’ interim for your transition or challenge, good for you.  If the interim is experienced and sophisticated, you should not have any reservation about engaging them directly and putting them to work in your organization immediately.

Once the interim is aboard, do not lose sight and do not allow your organization to lose site of the purpose of the interim engagement which is usually to help an organization work through a transition usually while beginning the process of addressing major challenges or problems.  The scope of the work to be performed should be mutually understood and memorialized in the contract with the Interim Executive.  Subsequent departures from the agreed scope represent sub-optimization of the engagement at best and a useless waste of resources at worst.

An interim is not an employee and the more you treat them like an employee, the less effective they will be and the higher risk you will bear with respect to their status as an independent contractor.

A number of requirements must be met before your interim reaches reach the threshold of independent contractor status.  To name a few:

  • You cannot set the interim’s hours
  • You cannot dictate when and how the interim does their work
  • You cannot require the interim to use your facilities and equipment to do their job
  • You cannot subject the interim to your personnel policies and procedures like travel policies, etc.
  • You should not require the interim to participate in employee related activities like employee health, computer system training, etc., unless their specific responsibilities require patient contact or hands-on operation of hospital systems which should be very rarely.
  • You should never require interims to record time on your organization’s timekeeping system

The more you require your interims to engage in the actives of employees; things like requiring them to attend out of scope meetings, the higher your risk that the IRS may subsequently find that they were not independent contractors and subject your organization to payroll tax liability and overtime claims that you did not anticipate.

Time and again, I have been required by hospital personnel departments to go through all of the clearances and sometimes orientation of employees.  Then I get invited to every meeting in the organization.  All of this increases the client’s risk while wasting my time.  I have asked the person that executed my contract to screen and approve meeting requests to insure that I am able to stay on task and that the rest of the organization understands my roles and its limitations from their perspective.

I tell clients that regardless of the number of hours they pay for, they receive 100% of my mental capacity virtually 100% of the time.  I find it difficult if not impossible to mentally divorce myself from the needs and issues of my client whether I am ‘on the clock’ or not.  Because of this, flexibility of hours should not be an issue because when I am engaged, I am always working for the benefit of my client.  That said, I assure my client that regardless of the ‘normal’ schedule we agree to, I endeavor to make myself available on-site as needed.  This means spending weekends in the client’s city and/or traveling on behalf of the client for matters not related to Interim services commuting.

Take another look at my article about how to find an interim.  The effort you expend to locate a ‘free agent’ Interim Executive is worth the trouble.  My prediction is that you will thank yourself for taking charge of what should be expected to be one of the most important decisions you may ever make because of the potential of a well conceived Interim Engagement to be favorably transformative in your organization.

If you are a Board member or a CEO and you do not know where to start or how to go about finding an Independent Interim, get in touch with me and I will give you some pointers.

Contact me to discuss any questions or observations you might have about these articles, leadership, transitions or interim  services.  I might have an idea or two that might be valuable to you.  An observation from my experience is that we need better leadership at every level in organizations.  Some of my feedback is coming from people that are demonstrating interest in advancing their careers and I am writing content to address those inquiries.
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I encourage you to use the comment section at the bottom of each article to provide feedback and stimulate discussion.  I welcome input and feedback that will help me to improve the quality and relevance of this work.
This is original work.  This material is copyrighted by me with reproduction prohibited without attribution.  I note and  provide links to supporting documentation for non-original material.  If you choose to link any of my articles, I’d appreciate notification.
If you would like to discuss any of this content, provide private feedback or ask questions, I may be reached at ras2@me.com.

The Three Most Critical Issues for Today’s Board Directors

https://www.kornferry.com/institute/three-critical-board-issues-nacd?mkt_tok=eyJpIjoiT0RNd1pUVXpPRGczWmpjeiIsInQiOiJQVlRySWxNSnNoVDNzT0JVeDM4ZkhxcXV4TkRBN1ZCUDBGMERFM1N5R0daSmJFTUhMbUErdDJsSWtRXC9GYmNkUHl0MXFrUFwvaGZwYmZVd2JpTzFGQUs4cWZaTWxzYWRrY2hoMnhQODhMVm5BMHNNZjJHajFDc0JIZk9VYTYzcVJlIn0%3D

During this week’s National Association of Corporate Directors summit in Washington, DC, there will be lots of time spent on shareholder activism, executive compensation, and several other key in-the-moment issues. But Jane Stevenson, Korn Ferry’s vice chairman of the firm’s Board & CEO Services practice, says that those issues overshadow three, considerably more existential issues modern board directors have to address. Before her own panel presentation, Stevenson laid out what she thinks board directors should have on their minds.

1. Risk Management: Figure out what’s an opportunity and what’s a threat.

In today’s global and active economy, the lines between competitive markets have never been blurrier.

is Amazon a consumer company, for example, since it sells everything from groceries to garage door openers? Or is it a technology company, since it owns and operates the legions of computer servers that make e-commerce—its own and others—possible? With all the crossover, it’s very difficult for board members to assess whether all the disruptions are accelerators to the organization’s growth, or roadblocks.

2. Talent Alignment: Close the gaps between strategy and talent.

This is a huge topic because of the rapid pace of change and needs of leadership with the onset of artificial intelligence and the changing nature of commerce, as our society potentially moves from an exchange of goods to a thought exchange. Typically, there is a good amount of lead time for any transformational innovation, but once it takes hold it tends to be exponential. Boards really need to be able to see around hairpin turns and to fly at a high enough elevation to anticipate appropriately.

Boards needs to step up in a different way and think with a different level of expansiveness, involvement and opportunity building. The day of boards just evaluating based on what’s happening today is not enough, it takes years to build those outcomes. It’s not just about identifying problems, but also about awareness. Boards need to ask the right questions (not just regulatory) that help to improve leadership. Boards need to look at the world and create a lens that the CEO would not have complete access to without the directors.

One way to think about it is: Do you have the right board to pick the next CEO? Do you have the right CEO in place to have the right leaders? Are the right leaders the ones to really define the right workforce of the future? How much of that workforce is human and how much of it is evolving into artificial intelligence and robots?

3. Information Overload: Everyone has information, learn how to connect the dots better.

Access to information used to be a huge cost for businesses. That has gone down enormously. Today, the real questions are: What does the information say? What does it mean? And how do we use it? Whole businesses are changing. The boards have to adapt. What boards have to do is to step up to a different kind of leadership, anticipating what will create value, how that impacts the organization, and evaluating if the right leadership is in place to make those pivotal operating decisions on a day-to-day basis. Boards of the future must look forward in a different way and think with a different level of expansiveness, involvement and opportunity building.

In the end, it all comes back to talent and succession, which are tightly aligned. Talent starts with the board and goes down to the lowest level of employees. It will take different kinds of thinking in the boardroom to effectively anticipate all of these issues. The need for diversity in the boardroom to do that effectively and anticipate things effectively has never been higher, not because it’s a do-good cause but because it will require nimbleness in thinking and diversity of perspectives to make that happen.

More examples of what not to do AKA how to stay in the frying pan and not fall into the fire.

https://interimcfo.wordpress.com/2017/08/01/more-examples-of-what-not-to-do/

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This is the second article in the series about what not to do.  The person suggesting this article asked for examples of things that might help you save yourself from yourself.  Please send me your examples and stories of things not to do.  Your confidentiality will be protected unless you want credit for the idea.  Sharing this experience, especially with younger executives is one of the best ways to serve the industry.  I have an outline of a third article and depending upon response, I could probably keep this going for a while since like a consultant friend of mine used to say, “One idiot can keep three consultants busy forever.”

Project planning

Ben Franklin’s adage goes, “Failing to plan is planning to fail.”  I have found this profound simple statement to be true time and again.

After being appointed interim CFO in a hospital, I learned that there was a major construction project under way.  The project and the rate at which the hospital was burning money on the project did not make sense to me.  To make a long, complicated story short, no one could produce a feasibility study to support the project’s value proposition or pro-forma analysis to support the project’s underlying  financing.  When no one could produce a sources and uses of funds analysis, I spent a couple of weeks creating my own from scratch.  When I was finished, it was clear that the project was underfunded by over $20 million and the hospital did not have sufficient reserves to cover the shortfall.  When this information was provided to the Board, after they recovered from the shock and horror, they decided to stop the project that would have resulted in a default in the bonds by drawing reserves below bond covenant minimum requirements triggering a technical default.  The entire organization was oblivious to this looming disaster.

Ole Abe said that, “You should spend twice as much time sharpening your axe as you spend cutting with it.”  The implication of this admonition is obvious to anyone that has ever cut wood with an axe.  Still and yet, executives let distractions and competition for their time lead them to allow ill-conceived initiatives to go forward then they are surprised when the projects blow up on them.  If you want to entertain yourself, pick any executive out at a cocktail party and ask them if they have ever seen a project go bad.  The war stories you will hear are spectacular. Better yet, ask the ‘expert’ if they have ever seen a peer do something stupid.  Apparently, they have not heard or have disregarded the advice of Einstein, “Doing the same thing and expecting a different outcome is the beginning of insanity.”

Project control

Oh boy!  The easy part of a project is the planing and approval.  The hard part is execution.  There are a lot of challenges with project execution.  One is that other unanticipated confounding priorities arise in the organization that bleed capacity from the organization’s leadership to remain focused on a critical project.  Another commonly seen problem with project execution is the loss of key leaders during the course of the project.  All too frequently, critical assumptions underlying the project’s rationalization are proven inaccurate or incomplete once execution begins.  Sometimes, a project’s success is largely dependent upon one person and if that person leaves or is incapacitated, the entire project goes into jeopardy.

To some degree, a project is analogous to a marriage.  In order for it to succeed, more than 100% commitment is required from all sides.  Every effort you make to manage your risk can be thwarted by uncontrollable changes in your business partner(s).  There is no guarantee that the people that sold a deal and made commitments on behalf of your business partner will be around to honor those commitments.  If they made commitments that were not in the contract, they may not be allowed to honor them.  More than once before a project was completed, I have found myself dealing with an entirely different cast of characters.  What about a business partner that gets acquired during implementation and none of the commitments made before the acquisition are honored?  A business failure or overcommitment by a business partner can move into your life like bad in-laws.  This is why business partner selection is so important.  Too often, a decision maker will chose a business partner based on cost alone and in the process buy himself a set of problems that turn out to be exponentially more expensive than the most expensive option that was under consideration at the time the decision was made.

A project does not have to fail to become a disaster.  Delays in a project can be as damaging.  I do not know of a delayed project that resulted in a better outcome.  Sometimes, delays cause cascading problems.  Take a construction project for example where the electrical contractor is contracted to start on a date certain and the project is not far along enough for them to begin work.  This kind of a delay can rapidly spread throughout an organization and create enough problems to overwhelm the ability of the leadership team to address them.  This is the reason you were required to study PERT in school.  How often do you see it applied in practice?

If a mistake is to be made in project management, it should be biased in favor of overcompensation for potential problems.  I am regularly criticized for being too conservative and too hard on pro-forma analysis assumptions. Never the less, time after time I see projected revenues and time lines being overstated and projected expenses understated.

Waiting too long to intervene

I have watched executives demur from engaging an issue in hopes that it would go away.  I have rarely seen this strategy work.  More often than not, a problem in an organization will get worse the longer intervention is delayed.  There are a lot of reasons that this occurs not the least of which is that addressing operational problems most often involves dealing with a personnel problem.  I do not know many executives that enjoy taking on a personnel problem.  Vince Lombardi said, “Hope is not a strategy.”  Failing or refusing to intervene can allow a problem to become exponentially more damaging until it reaches the point that the organization’s financial statements are impacted.  Time and again as an interim, I have been asked, why it was going to take so long and cost so much to address a problem?  I have seen ten or more interim executives committed to address what had been allowed to become a major business problem on more than one occasion.  My answer to this question is always the same.  Cutting costs after an organization finally decides to address a problem only prolongs the time and cost necessary for the mitigation.  All too frequently, organizations create a problem by under-resourcing an area or initiative.  When this leads to a melt-down, the leaders charged with the mitigation are frequently frustrated by the cost and time associated with fixing the resulting mess.  Sometimes, I have to tell them for their future reference that the cost associated with keeping a process or function under control is always a small fraction of the time and resources necessary to straighten it out after it goes catawaumpus.  Every executive I know can relate one or more horror stories to prove this point.  More often than not, the fiasco is related to an I/T implementation where the costs and operational consequences associated with a failed project can exceed the original budgeted cost of the project.

Fire fighters are known for over-commiting resources to a fire.  This strategy is designed to err on the side of having more resource than is needed to address the fire as opposed to running the risk that a growing fire will overwhelm the resources that are available on site.  Once, I asked an interim CEO how it was going relatively early into his engagement in a very troubled large hospital.  His answer that I have never forgotten was, “The platform is on fire.”  A platform is like a ship.  When it catches fire, getting off is rarely an option.  You must fight the fire where it is and failure is not an option.  Remember the USS Forestall?  Skimping on resources when dealing with a problem like this can lead to figurative death in the form of an unplanned career transition.  A business problem is analogous to a fire in the organization.  If you are going to make a mistake addressing a problem, your personal risk will be much lower if you respond aggressively to a problem and err on the side of over-commiting resources until the problem is resolved and the situation stabalized.  The alternative is a potential conflagration.

Non-evidence based decisions

The mantra of UAB’s Doctorate of Administration in Health Sciences program is, “Evidence based practice in Healthcare Administration.”  I have commented before on what appears to be a paradox in healthcare.  On the clinical side, most of what is done is based on evidence gained from objective, peer reviewed research.  The purpose of the research is to yield better outcomes and safer facilities for patient care.  In the administrative suites of too many healthcare organizations, decisions are routinely made based on seat-of-the-pants hunches, little or no analysis, ridiculous assumptions, no assumptions, flawed analysis, systematic ignorance or reckless disregard of applicable evidence and research.  More often than not, harried administrators do not even bother to see if any applicable research is available.  In other cases, decisions are made for political expediency or to appease Dr. Huff-and-Puff.  I got into trouble in a Catholic hospital for suggesting the leadership team’s decision making ranged from magic eight ball to Ouija board.  I now keep a magic eight ball on my desk as a reminder to not fall into this trap.  It is funny to have younger people ask me what the magic eight ball is. They’re not old enough in some cases to have ever heard of the magic eight ball and they are fascinated to see how it works. It is a wonder some organizations get along as well as they do.

Indecisiveness
I was perusing novelty signs in a gift shop in Indiana when a sign captured my attention.  It said, “Decision making around here is like a squirrel crossing the road.”  Indecisiveness can be dangerous when it is practiced in the front office.  At its least, indecisiveness can lead to project and initiave delays.  At worst, it can wreck not only projects but the credibility of executives with their Boards.  There’s a one liner that says, “The road to failure is littered with run over squirrels.”  In an earlier article I said, “If you are a decision maker, make a decision.”  Not making a decision is making a decision.
As before, I would like to thank Dr. Christy Lemak Professor and Chair of the UAB Department of Health Services Administration for the inspiration or should I say assignment that resulted in this article. I am looking forward to seeing my grade.
Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.
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Amid tension with CHS, 3 more executives and advisory board member quit Lutheran Health Network

http://www.beckershospitalreview.com/hospital-management-administration/amid-tension-with-chs-3-more-executives-and-advisory-board-member-quit-lutheran-health-network.html

Image result for lutheran health networkImage result for lutheran health network

Three top executives of Fort Wayne, Ind.-Lutheran Health Network and a member of the system’s advisory board have resigned due to actions by LHN’s parent company, Franklin, Tenn.-based Community Health Systems.

LHN Medical Staff President James Cameron, MD, Lutheran Hospital President-elect Matt Carr, MD, and Lutheran Hospital Medical Staff Vice President Marlene Bultemeyer, MD, announced their resignations in a letter sent Friday to the system’s acting CEO Mike Poore, according to the News-Sentinel.

“Although we had the most sincere intentions of guiding the medical staff in the years to come, the events of the past days and weeks have shown that this process will take more than we could individually or collectively accomplish without compromising the quality of care we now provide our patients,” they wrote.

Tom Kelley, a member of the advisory boards for LHN and Lutheran Hospital also resigned Friday, according to The Journal Gazette. He resigned one day after Chuck Surack stepped down from the advisory boards.

The new resignations come after CHS rejected a buyout offer from a group of LHN physicians in May. After saying no to the deal, CHS fired Lutheran Health Network CEO Brian Bauer and CMO Geoff Randolph, MD. Lutheran Hospital CMO Matthew Sutter, MD, resigned in June and Steven Orlow, MD, the system’s CMIO, resigned earlier this month.