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Brace for Healthcare Management Shakeups

Philip Betbeze, for HealthLeaders Media, June 3, 2011

No, this isn't a story about the latest CEO to face a no-confidence vote from his physicians. In today's healthcare world, that kind of revolt seems quaint.

It's about how you're going to be able to thrive in a lower reimbursement environment that requires you to find and implement big efficiencies.

You're probably pretty comfortable with the way your lieutenants report to you in your organization. Sure there are issues, but for the most part, you and your team get things done.

But don't get too comfortable. Dealing with accountable care organizations or value-based purchasing protocols is challenging.

I'm not exaggerating when I say we are experiencing a seismic shift in what you're ultimately compensated and rewarded for in healthcare, whether from the commercial or government payer side. Perhaps, in light of that fact, you should look at performing a similar seismic shift in your organizational hierarchy.

While researching this topic for an upcoming story in HealthLeaders magazine, I talked to several top executives at leading healthcare organizations across the country. To be sure, most of them are large, multi-hospital, multi-site organizations, but their lessons also apply to smaller systems and even standalone hospitals. The old way of strategic planning and execution just isn't going to cut it anymore. You can be proactive about it or you can wait until there's no other choice but to blow up your management team—either way, you're going to have to change.

"Ok smart guy," you're probably saying to yourself, "what do you know about how best to organize my top executives?"

Well, honestly, not much, but I do talk to a lot of people who have proved over time that they know what they're doing by demonstrating quality outcomes and patient experience scores, and yet, they realize their current structure is not preparing them to deal with accountability for those metrics as well as many others. So I give them the benefit of the doubt when they tell me that they're reorganizing their reporting structure to centralize authority and reduce the independence of individual sites to do things that would be best done with the clout and expertise of the entire system, such as technology upgrades, bricks and mortar, and labor issues. That approach provides more flexibility and keeps organizational goals, as opposed to individual site goals, at the forefront.

Now you're probably saying, "if I do that, my docs will revolt, and I'll be out of a job."

Comments are moderated. Please be patient.

3 comments on "Brace for Healthcare Management Shakeups"


John (6/8/2011 at 4:32 PM)
Robert, it's interesting that the airlines analogy was used. We know how well that's worked for them...

Robert Trinka (6/7/2011 at 11:43 AM)
Phil, it is interesting that Thomson Reuters recently ranked the Top Ten Health Systems, which includes names like Advocate Health Care, Mayo, Partners Healthcare, etc. The eight criteria they used included, In-hospital mortality, Medical complications, Patient safety, Average LOS, 30-day Mortality rate, 30-day readmission rate, Adherence to clinical standards of care, and "HHS" patient survey score. No specific inclusion of expense management, cost controls and containment, or per cent increase/decrease in total cost of care. Ironically, the single largest issue facing all healthcare providers (whether they know it or not) is COST! A hospital or health system management team should be looking at major real cost reductions over the next 5 to 10 years of up to 50%, while improving quality standards and benchmarks. Impossible? No. And if no one believes that will be required, just ask the airlines (post 1978 deregulation) and other industries that have had to change the way they did business to dramatically reduce cost in a short period of time while maintaining the essential standards of service and performance. That will be the challenge and the survivors will figure out how to do it.

Stefani (6/6/2011 at 2:18 PM)
Phil - The hospital infrastructure is archaic. We all know that. A dual governance system is just plain inefficient and perpetuates the 'we-they' dichotomy that keeps the medical staff distant from the executive staff. Each must share the same economic and quality goals and have equal interest in achieving them.