Imagine for a second that your boss is miles away from the day-to-day. A sufferer of Corner Office Syndrome he or she continues to make command decisions without consulting the team. The decisions are astounding to you and you start to question these far-off choices.
Now, your attention isn’t on doing the right thing for the business, but on how to stop the wrong thing your boss has put in play. You have two options. You could bite your lip and go with the flow. …Or …try to address this head-on which is no easy feat.
It could be too big of a risk to put your livelihood at stake. Your mind drifts again — pondering if this company is the right place for you. You wonder why you care so much. The easy thing to do would be to care less.
The truth is your faith in the business has splintered.
This inner conversation happens to many of us. When it does, you are officially not a believer anymore. You are transgressing into a fake believer.
When you lose belief, or don’t have something to believe in, it’s easy to fake believe.
But as Navy SEALs Jocko Willink & Leif Babin remind us in their book, “Extreme Ownership: How U.S. Navy SEALS Lead & Win”, “They must believe in the cause for which they are fighting, they must believe in the plan they are asked to execute, and most important, they must believe in and trust the leader they are asked to follow.”
Building a cultural rocket ship is more rocket art than rocket science.
If your responsible for hiring talent in your company, then you already know it comes down to creating, retaining and sustaining internal believers.
Why is this so important?
Because believers aren’t just wanted—they are needed in order to create the necessary conviction that makes your organization thrive.
Consider these questions for a second: Do you often feel like you are on an island alone in your company? Do you have coworkers you can genuinely trust? Do you feel you’re being sucked into corporate politics? Are you in a Watch-Your-Back Culture or a Got-Your-Back Culture?
These are the questions that need to be openly talked about with your teams. And these are the types of conversations that are welcomed by true leaders.
This might be a good time to share a truth. I have a major gripe with the word leadership. Make no mistake that I believe we are in dire need of courageous leaders. However, I’ve seen too many poor leaders turn leadership into cheerleadership.
Poor leaders start ra ra’ing to their employees, which may work with some of your workforce, but your elite producers can see right through it. Internal discord starts the minute you send staff down inside themselves questioning, wondering and calling out a faulty decision.
Management guru Ken Blanchard is spot on when he writes……“It takes a whole team of people to create a great company but just one lousy leader to take the whole business down the pan.”
Making Believers all starts at the top with what I call your Believership.
I’m sure you noticed the world choice. The clear mission of leadership is to transform into the company’s Believership. The Believership’s job is to create believers in all directions: making believers out of your employees, your prospects, your customers and, when appropriate, your board.
One final reason I like calling it a “Believership” is because successful leading is not simply about one person. There’s a checks and balances system working together at the top – if you’re lucky, that group shares values but brings breadth of experience to the table. Courage and business are both team games.
Having an aligned Believership makes it easy for employees to believe. They set the vision for the company, deliver the truth (no matter how hard the circumstance) and create trust – the most essential ingredient – that unlocks a successful team.
When my children were taking violin lessons and were given a new piece to learn, they would start from the beginning and race through the song at breakneck speed. One day, their teacher offered an insight that radically altered how they were able to progress. He told them that if they wanted to play fast, they would first have to practice slow. Similarly, taking the time to slow down and plan improvements to workplace culture also produces more effective results down the line.
Workplace culture isn’t something you can instantly fix, swap out, or quickly reboot. It’s not like a used car you can trade in when it no longer runs smoothly. Culture change requires culture work – and success necessitates effort and attention. Rather than being daunted by this task, we need to take a breath, slow down, and intentionally chart our course forward.
We recently worked with an organization who took the advice to slow down and take the time to invest in their long-term workplace culture to heart. Their decision was precipitated by a harassment complaint that revealed many layers of dysfunction – they could no longer ignore the impact their unhealthy culture was having.
Management was distant and unaware of the tension between employees, staff turnover was high, valued customers were leaving, and the human resources department admitted they were overwhelmed with the flood of complaints. The task of improving their workplace seemed enormous, but they decided to roll up their sleeves and get to work.
Senior management started by doing a cultural assessment and mapping out a plan. They began with a number of simple fixes to jumpstart the process. They revamped their respectful workplace policy, as well as held a training day for all staff to inform them of the current cultural assessment. Supervisors and management began joining employees in the common area during breaks.
To begin the long-term work of culture change, the organization initiated dialogue with staff and instituted weekly check-ins. They also revamped their performance management process to include a quarterly focus on employees’ goals, and provided all supervisors with training on conflict resolution and how to give effective feedback. These, along with a number of other changes, started to slowly shift their workplace culture in the right direction.
Now several months into the process, they are beginning to see the positive results! Staff are happier and more engaged, which has led to better productivity and an improvement in the quality of work being done. Their human resources department feels supported by management, and complaints have dropped as supervisors gain confidence in their ability to coach and support employees.
This organization realized that it would take time to replace the unhealthy culture with a healthy one, and that it couldn’t happen all at once. As a result of their patient and intentional work, they have seen a slow but marked improvement in their culture.
Culture is often so ingrained that people take it for granted. When we recognize that there are long-standing issues that we need to address, the work ahead can feel overwhelming, but culture won’t be improved with one-off initiatives like taco Tuesday or yearly surveys. Culture develops over time, and therefore takes time to change. Taking small steps to create a culture that will become the new standard may feel like slow work, but the rewards of a healthier culture are more than worth the wait.
“The health care system has become horribly perverted,” says Alex Gibney, director of The Inventor: Out for Blood in Silicon Valley.
Nobody likes having a needle stuck in their arm. And nobody likes having money sucked out of their wallet, either. So when smart young entrepreneur Elizabeth Holmes emerged from Silicon Valley claiming to have a cure for a broken health care system, politicians and journalists and investors couldn’t wait to shower her with praise and money.
But the story of Holmes’ company comes with a sting. Her black outfits helped create an image of a new Steve Jobs-esque voice in Silicon Valley, but after faking demos and lying about patient treatment Holmes and her partners are now awaiting trial on charges of fraud.
The Theranos fraud exposes fundamental problems with Silicon Valley, the health care industry and the myth of the genius inventor from Thomas Edison to Steve Jobs. New documentary The Inventor: Out for Blood in Silicon Valley, now available to stream on HBO, reveals the whole bloody mess.
I asked the film’s Oscar-winning director, Alex Gibney, if we fetishize the idea of a genius inventor. “We do,” he told me by phone from San Francisco, “and it’s bullshit.” Having tackled corruption and deceit in films about Enron, the Church of Scientology and the White House, Gibney describes Holmes as “a variation on a theme” of the type of people he’s seen before. “Elizabeth was afflicted with the notion that the end justifies the means,” Gibney says. “She thought she was entitled to make mistakes because her intention was pure and worthy and socially vital. But the mind plays tricks with you when you start down that path, as you rationalize your behavior in ways that can become quite dangerous and delusional.”
Big-name investors from both inside and outside Silicon Valley fell for Holmes’ delusion, including Rupert Murdoch, who invested $125 million into Theranos. But the question remains whether the profit-driven private sector is even suited to solving health care problems. “Reports show the health care system in the US has become horribly perverted,” says Gibney, “through this patchwork system of insurance and private enterprise and then also government legislative initiatives. Medicare is not allowed to negotiate directly with drug companies, how crazy is that?”
Everyone can agree that fixing problems in health care is a noble cause, but relying on Silicon Valley and the private sector also lined up with other political agendas for the politicians who backed her. “This notion of the entrepreneur lets government off the hook,” Gibney says.
The director does credit Holmes with highlighting problems in the laboratory testing industry. “They’re incredibly opaque with their pricing,” he points out. Patients don’t pay directly for blood tests, so depending on the circumstances, the illness or even the state, lab companies can charge outrageous prices to insurance companies to complete the test.
The health care system “is designed to enrich companies rather than to serve the health of patients,” says Gibney. “It’s full of all sorts of bad incentives.”
While things clearly need to be improved, the Silicon Valley style of disruptive innovations may not be what we as patients need. Taking control of your own health is a “a very cool-sounding libertarian notion,” but Gibney cautions that “we’re not doctors.” He’s concerned about the idea of treating patients as customers, seducing us with promises of competitive prices and greater choice. “That’s good for sneakers,” he says, “but I’m not sure a consumer/producer relationship is necessarily good for health care. You want a patient/doctor relationship, and blood testing is part of it.”
Silicon Valley has adapted the credo of “move fast and break things,” which means iterating and making mistakes until you find the right path. But you can’t make mistakes when people’s lives are at stake. And real people were put at risk when Theranos pushed ahead with a contract with Walgreens to carry out blood tests for ordinary people.
“That was a line Elizabeth crossed,” says Gibney. “If she had just wasted a lot of investors’ money on a machine that didn’t work, there wouldn’t really be a story here. It was when she put people at risk, that was the problem.”
Gibney is concerned that Holmes will be portrayed as a one-off, “one rotten apple in an otherwise pristine barrel.” But he thinks the Theranos fraud shows cracks across Silicon Valley, the health care industry and capitalism as a whole. “I tried to indicate there are bigger problems in Silicon Valley in terms of lying, in terms of becoming disruptors in ways that may make people a lot of money but may not always be a good thing.”
Within Theranos, a culture of silence and paranoia couldn’t suppress the lies forever. And so Theranos employees blew the whistle on the deceit.
“I think all of us should be aware that there are certain cultural, and also legal, impediments to hearing the bad news,” says Gibney, who highlights the use of nondisclosure agreements to gag employees. These legal contracts are supposed to protect trade secrets, but they can also be used to prevent insiders from calling out corruption. “Look at,” Gibney says. “NDAs are rapaciously used by people to cover up misdeeds.”
Yet for some reason, we have a strange relationship with those insiders who do come forward. “It’s sort of like they’re showing us up,” says Gibney. He recalls being asked the same two questions over and over after making The Smartest Guys in the Room, his film about the corruption within Enron: “One was about this guy who got away with it, sailed off with $200 million and married a stripper. But the other question was about Sharon Watkins, the whistleblower, and it was always, ‘Who does she think she is? How come she’s so holier-than-thou?’ Of all the lessons to take away from Enron, she’s not really the malefactor, but it seemed to really get under people’s skin.”
Gibney has made a career out of exposing corruption from the business sector to the CIA to the White House. “Part of us is secretly thrilled by people who are conning the game,” he says. “But we always at the end want to see them punished, so it’s kinda like a double pleasure. You wanna see ’em sneak around — and then you wanna see the hammer come down.”
“I’ve been spending a lot of time on problems,” Gibney says as we wrap up the interview. “I’m starting to think about doing films about people who are coming up with solutions.”
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, 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 seen 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.” Aurora in 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 consumers, 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.
A recent Navigant survey found that U.S. hospitals and health systems experienced an average 39% reduction in their operating margins from 2015 to 2017. This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. As I speak with industry executives, a common refrain is “I’ve done all the easy stuff.” Clearly, more is needed. Cost reduction requires an honest and thorough reassessment of everything the health system does and ultimately, a change in the organization’s operating culture.
When people talk about having done “the easy stuff,” they mean they haven’t filled vacant positions and have eliminated some corporate staff, frozen or cut travel and board education, frozen capital spending and consulting, postponed upgrades of their IT infrastructure, and, in some cases, launched buyouts for the older members of their workforces, hoping to reduce their benefits costs.
These actions certainly save money, but typically less than 5% of their total expense base. They also do not represent sustainable, long-term change. Here are some examples of what will be required to change the operating culture:
Contract rationalization. Contracted services account for significant fractions of all hospitals’ operating expenses. The sheer sprawl of these outsourced services is bewildering, even at medium-size organizations: housekeeping, food services, materials management, IT, and clinical staffing, including temporary nursing and also physician coverage for the ER, ICU and hospitalists. More recently, it has come in the form of the swarms of “apps” sold to individual departments to solve scheduling and care-coordination problems and to “bond” with “consumers.” There is great dispersion of responsibility for signing and supervising these contracts, and there is often an unmanaged gap between promise and performance.
An investor-owned hospital executive whose company had acquired major nonprofit health care enterprises compared the proliferation of contracts to the growth of barnacles on the bottom of a freighter. One of his company’s first transition actions after the closure of an acquisition is to put its new entity in “drydock” and scrape them off (i.e., cancel or rebid them). Contractors offer millions in concessions to keep the contracts, he said. Barnacle removal is a key element of serious cost control. For the contracts that remain, and also consulting contracts that are typically of shorter duration, there should be an explicit target return on investment, and the contractor should bear some financial risk for achieving that return. The clinical-services contracts for coverage of hospital units such as the ER and ICU are a special problem, which I’ll discuss below.
Eliminating layers of management. One thing that distinguishes the typical nonprofit from a comparably-sized investor-owned hospital is the number of layers of management. Investor-owned hospitals rarely have more than three or four layers of supervision between the nurse that touches patients and the CEO. In some larger nonprofit hospitals, there may be six. The middle layers spend their entire days in meetings or on conference calls, traveling to meetings outside the hospital, or negotiating contracts with vendors.
In large nonprofit multi-hospital systems, there is an additional problem: Which decisions should be made at the hospital, multi-facility regional, and corporate levels are poorly defined, and as a consequence, there is costly functional overlap. This results in “title bloat” (e.g., “CFOs” that don’t manage investments and negotiate payer or supply contracts but merely supervise revenue cycle activities, do budgeting, etc.). One large nonprofit system that has been struggling with its costs had a “president of strategy,” prima facie evidence of a serious culture problem!
Since direct caregivers are often alienated from corporate bureaucracy, reducing the number of layers that separate clinicians from leadership — reducing the ratio of meeting goers to caregivers — is not only a promising source of operating savings but also a way of letting some sunshine and senior-management attention reach the factory floor.
However, doing this with blanket eliminations of layers carries a risk: inadvertently pruning away the next generation of leadership talent. To avoid this danger requires a discerning talent-management capacity in the human resources department.
Pruning the portfolio of facilities and services. Many current health enterprises are combinations of individual facilities that, over time, found it convenient or essential to their survival to combine into multi-hospital systems. Roughly two-thirds of all hospitals are part of these systems. Yet whether economies of scale truly exist in hospital operations remains questionable. Modest reductions in the cost of borrowing and in supply costs achieved in mergers are often washed out by higher executive compensation, more layers of management, and information technology outlays, leading to higher, rather than lower, operating expenses.
A key question that must be addressed by a larger system is how many facilities that could not have survived on their own can it manage without damaging its financial position? As the U.S. savings and loan industry crisis in the 1980s and 1990s showed us, enough marginal franchises added to a healthy portfolio can swamp the enterprise. In my view, this factor — a larger-than-sustainable number of marginal hospital franchises — may have contributed to the disproportionate negative operating performance of many multi-regional Catholic health systems from 2015 to 2017.
In addition to this problem, many regional systems comprised of multiple hospitals that serve overlapping geographies continue to support multiple, competing, and underutilized clinical programs (e.g., obstetrics, orthopedics, cardiac care) that could benefit from consolidation. In larger facilities, there is often an astonishing proliferation of special care units, ICUs, and quasi-ICUs that are expensive to staff and have high fixed cost profiles.
Rationalizing clinical service lines, reducing duplication, and consolidating special care units is another major cost-reduction opportunity, which, in turn, makes possible reductions in clinical and support personnel. The political costs and disruption involved in getting clinicians to collaborate successfully across facilities sometimes causes leaders to postpone addressing the duplication and results in sub-optimal performance.
Clinical staffing and variation. It is essential to address how the health system manages its clinicians, particularly physicians. This has been an area of explosive cost growth in the past 15 years as the number of physicians employed by hospitals has nearly doubled. In addition to paying physicians the salaries stipulated in their contracts, hospitals have been augmenting their compensation (e.g., by paying them extra for part-time administrative work and being on call after hours and by giving them dividends from joint ventures in areas such as imaging and outpatient surgery where the hospital bears most of the risk).
The growth of these costs rivals those of specialty pharmaceuticals and the maintenance and updating of electronic health record systems. Fixing this problem is politically challenging because it involves reducing physician numbers, physician incomes, or both. As physician employment contracts come up for renewal, health systems will have to ask the “why are we in this business” and “what can we legitimately afford to pay” questions about each one of them. Sustaining losses based on hazy visions of “integration” or unproven theories about employment leading to clinical discipline can no longer be justified.
But this is not the deepest layer of avoidable physician-related cost. As I discussed in this HBR article, hospitals’ losses from treating Medicare patients are soaring because the cost of treating Medicare patient admission is effectively uncontrolled while the Medicare DRG payment is fixed and not growing at the rate of inflation. The result: hospitals lost $49 billion in 2016 treating Medicare patients, a number that’s surely higher now.
The root cause of these losses is a failure to “blueprint,” or create protocols for, routine patient care decisions, resulting in absurd variations in the consumption of resources (operating room time; length of stay, particularly in the ICU; lab and imaging exams per admissions, etc.).
The fact that hospitals have outsourced the staffing of the crucial resource-consuming units such as the ICU and ER makes this task more difficult. Patients need to flow through them efficiently or the hospital loses money, often in large amounts. How many of those contracts obligate the contractual caregivers to take responsibility for managing down the delivered cost of the DRG and reward them for doing so? Is compensation in these contracts contingent on the profit (or loss avoidance) impact of their clinical supervision?
These are all difficult issues, but until they are addressed, many health systems will continue to have suboptimal operating results. While I am not arguing that health systems abandon efforts to grow, unless those efforts are executed with strategic and operational discipline, financial performance will continue to suffer. A colleague once said to me that when he hears about someone having picked all the low-hanging fruit, it is really a comment on his or her height. Given the escalating operating challenges many health systems face, it may be past time for senior management to find a ladder.
When we think of bullying, we’re usually worrying about our school-age kids or remembering bad experiences from high school.
We learn quickly in the health care field that bullies don’t change once they enter the clinical world. Health care, with its incredible differential in knowledge, authority and pay creates large power differentials and easily generates subordinate/superior relationship dynamics.
Bullying occurs within professions between trainees and trainers and faculty, and across clinical areas when there are knowledge differences such as between specialists and primary care. Mistreatment also frequently occurs in an interdisciplinary manner between physicians and non-physicians, supervisors and direct reports, nurses, and technicians.
For many (bully and bullied alike), this has been considered the price of entry into the healthcare arena.
The fears generated by the power differentials are very real:
Through trial and error, bullies find the right formula to preserve the power dynamics.
These unspoken fears create a culture of silence. It then becomes very difficult to achieve a culture of high reliability, which operates on a framework of deference to everyone’s expertise with an intense preoccupation with avoiding errors and failure. I have seen this culture of silence lead to OR fires and use of new OR equipment and procedures without adequate training or supervision.
An organization-wide “anti-bullying statement” should stop the problem, right? Not likely. An organization where I once served in administration had such a statement but also had a “hidden agenda,” i.e., ‘”We need these doctors to bring in business and need these nurses’ experience.” It led to confusion as to what the organization would stand for. Staff began accepting physician rounding at 10 p.m. and used equipment in the OR without proper training.
Working with the medical staff leadership, we opened some honest conversations around patient safety. Both groups were surprised. The medical staff thought administration was OK with the unsafe behaviors; the administration team hadn’t even been made aware of them until that point.
Having a policy against disruptive physicians and nurses is a Band-Aid for a much deeper issue. Many physicians rightly resent the implication that a legitimate disagreement with another healthcare professional can immediately and irrevocably label one “disruptive” without a fair hearing. Stories of false accusations fuel the need for physicians to protect each other, to the detriment of improving the system.
There are more effective ways to address this complex problem. Those on the “wrong side” of the power differential need scripting to defuse the confrontation. For example, a nurse being yelling at by a physician about being paged at 2:00 a.m. regarding “non-urgent orders” could neutralize the situation by calling attention to the behavior, while still allowing an escape route for de-escalation by saying “It sounds like you are having a bad night. Are you yelling at me or simply venting?” Simple lines like these can empower line staff to safely de-escalate these situations and re-train those on the “right side” of the power differential.
Now, a single physician or nurse practicing scripting won’t be able to implement a culture change. It’s up to medical and nursing officers to establish the expectation that physicians and nurses will learn and apply such tools.
Medical staff officers must enlighten clinicians on how a culture of fear leads to more complications and patient harm. Medical errors occur when the safety systems designed to catch an error before it reaches a patient are short-circuited, which is commonplace if physicians give in to the doctor yelling the loudest.
Research from the Vanderbilt Center for Patient and Professional Advocacy in Patient Advocacy Reporting System (PARS) and Co-Worker Observation Reporting System (CORS) databases supports the notion that truly disruptive physicians are the minority and can be identified by staff and patient complaints. It further validates the potentially adverse outcomes and unsafe environment physician bullies perpetuate.
Their research also shows that “what gets measured, matters” as these “disruptive providers” don’t always need to be reported to NPDB. Some physicians simply need to understand that their behavior, though considered acceptable in past generations, needs to change.
With new scripting to manage an increasingly difficult health care environment and clear expectations laid out by medical staff officers, it’s entirely reasonable to expect the same zero tolerance for bullying in health care environments that now exists in our children’s schools.