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Healthcare Crisis and Transformational Leadership

Larry Barnes, for HealthLeaders Media, October 10, 2008

Regardless of the outcome of this presidential election or other political agendas, the healthcare system of this country, which has been described by most industry observers as in crisis, is poised for significant change. One of the primary problems associated with healthcare is related to cost. Not only are healthcare costs significantly greater in the United States than other industrialized countries, but they continue to increase. The chairman of the Federal Reserve Board, Ben Bernanke, recently noted that healthcare represents about 15% of this country's gross domestic product and with similar growth will represent 22% by 2020 and 50% by 2050. This projected growth could have a devastating impact on the United States.

A compounding issue is related to population growth, as well as, increased life expectancy. The report, "Health, United States," by the National Center for Health Statistics indicated that life expectancy at birth has increased from 47.3 years in 1900 to 77.8 years in 2004. As our population lives longer, more healthcare resources are necessary, which increases demand for these resources. The baby-boomers have also begun to reach traditional retirement ages. The increase in demand for healthcare coupled with an increase in healthcare costs are the primary issues precipitating this crisis in our healthcare system.

The effective application of information technology has been suggested as a potential mitigating factor for this anticipated crisis. Leadership competence in information technology is crucial and can be enhanced through the adoption and application of an appropriate leadership style, such as transformational leadership.

Transformational leadership
This leadership model is described as a process in which followers trust, admire, and respect their leader, and are consequently motivated to do more than they were originally expected to do. The concept of transformational leadership was introduced by J.M. Burns in 1978 and enhanced my B.M. Bass in 1985. The four components of transformational leadership are charisma, inspiration, individual consideration, and intellectual stimulation.

Charisma. Transformational leaders motivate workers to exceed established performance standards and to transcend their self-interest for the good of the organization. For this to happen, workers must identify with their leader's values and vision of the future. This process is dependent on the leader's concern for workers in return for their trust. Transformational leaders can change an organization by identifying the need for change, articulating a new vision, and generating commitment to the new vision.

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