Care Coordination Needs CEOs

Inefficiency in hospital and health systems used to be rewarded—not willfully, but because there wasn't a good business reason to change things. Now there are financial incentives for care coordination, which takes teamwork—and leadership.

Last week I moderated a HealthLeaders Roundtable about the new skills top executives need to develop or polish in a new world of healthcare delivery, where little seems certain and much seems at risk.

The discussion centered on the contention that many of the attributes by which top executives are evaluated are changing rapidly—as quickly as incentives and business realities are changing.

The Roundtable will be published in the September issue of HealthLeaders magazine. Unfortunately, a roundtable is a 3 ½-hour discussion, so only the highlights make it into the actual publication, leaving a lot of valuable insights on the "cutting room floor." And September is a long way off, so I thought I'd share here some of what we talked about that won't make it into the final version.

For starters, I was surprised that what our panelists had to say about how expectations are changing had as much to do with changing culture and mindset as it had to do with skills.

The essence of the discussion about culture and mindset can be boiled down to this: Everyone, from the CEO on down, must learn to work as a team. Well of course, I thought. Teamwork is the best way to accomplish a difficult goal. That's common sense.

But for many years, teamwork has not only been anathema to the "physician as god" mindset, but it's been toxic for revenues in a roundabout sort of way.

The less simple healthcare was, the less profitable. That's pretty blunt, but it's also pretty true. That doesn't mean teamwork was discouraged, but that other than some isolated instances, there was little to encourage it where the rubber meets the road—that is, financially.

Leaders knew this intuitively, even if they couldn't express why it was so difficult to engender teamwork among the different parts of the hospital.

I suppose I wasn't shocked to hear that the ability to work in and lead teams is very important for top executives in healthcare now. But I was surprised to hear concrete examples of how it can be accomplished.

I've covered healthcare for nearly 14 years, so I've heard for a long time about the industry's "silos" and how difficult it has been historically to break them down, even for a CEO. Toppling silos—areas in the hospital that don't realize or don't care how their actions affect other parts of the healthcare delivery system, has seemed the impossible dream.

To grossly oversimplify things, silos and their spawn, uncoordinated care, have led us to the navigational mess the healthcare system presents now to patients and their caregivers. And silos don't help with the costs either.

And there's the rub. Inefficiency has been rewarded—often not willfully, but because there just wasn't a good business reason to really push it.

Not anymore.

As one CEO panelist said at the Roundtable, "it's no longer good enough to be on time and to incur no overtime. It's about care pathways and it's about reducing utilization."

So now they get it.

Put simply, incentives work. And thanks to incentives, hospitals and health systems are paying much more than lip service to care coordination and developing a culture in which fewer resources are wasted, patient satisfaction is actually important, and teamwork across departments is rewarded. (You can argue either way whether incentives that engender care coordination and patient satisfaction are carrots or sticks, or whether they're optimal.)

It's been a long time coming.

Care coordination takes teamwork, which is why at least this group of leaders is serious about seeking individuals who, as one colorfully put it, "are comfortable playing in others' sandboxes and comfortable with others playing in theirs."

The industry is already turbulent as the Patient Protection and Affordable Care Act begins to take effect, and as payers, providers, and even hospitals try to get a handle on healthcare costs. But one person's cost is another's margin, and healthcare leaders must dance on an ever narrowing tightrope as they try to work smarter.

High levels of utilization, which used to pay hospitals and health systems' bills and salaries (and in many cases, still do),are no longer acceptable. And accountability for results, not just procedures, is adding a big layer of complexity to the art of running a hospital or health system.

But thanks to increased rewards for teamwork, at least you don't have to do it alone.

 There are other interesting discussions with hospital executives in the Roundtables section. Access is free.