The Time to Innovate is Now

Carrie Vaughan, for HealthLeaders Media, March 20, 2009

Your hospital is losing millions. You can't purchase new equipment or update aging facilities. Your endowments have dried up, and you may have to cut services and lay off employees—if you haven't already. Welcome to the life of a hospital executive in 2009.

The news isn't all bad, however. This recession may be the perfect time to reinvent your health system. Your entire organization—nurses, physicians, security, housekeeping, administration, etc.—is on the same page because the economic crisis hasn't happened in isolation. It's not just the hospital's finances that have been affected. Employees' investment accounts—401(k), college funds, and retirement savings—have taken a huge hit, people can't sell their homes, and unemployment rates are above 8%. Everyone understands these are challenging times and some sacrifices will need to be made. For example, employees at a teaching hospital in Boston recently volunteered to give up raises and forfeit past accruals of earned time to avoid a massive layoff of 600 employees. Their efforts have spared 450 of the 600 jobs.

Senior executives have the rare opportunity to lead an organization that is joined by a spirit of commonality. No one wants their coworkers to be laid off or the hospital to cut mission-critical services. As a result, people are more receptive to change, says Tami Merryman, chief quality officer at the University of Pittsburgh Medical Center. It's not uncommon for healthcare workers to resist changing a process even if the end goal is to be more efficient and cost effective simply because that is the way they have always done it. People don't like change. The recession has changed that mindset, however. People are far more willing to change behavior and inefficient processes if it can reduce costs and help the organization avoid staff cuts or limiting services. "The emotional bar of change has moved as a result of the recession," says Merryman.

For example, physicians are more open to standardizing clinical processes that can help the organization be more efficient, she says. It's opened a door that otherwise may have been closed. That doesn't mean a consensus will automatically emerge. But hospitals aren't spinning their wheels trying to convince key stakeholders that action is needed, says Bill Hejna, a senior principal with the consulting firm Noblis Center for Health Innovation.

This is quite possibly the best time for healthcare organizations to be innovative. An article in Business Week says entrepreneurs view the recession as an opportunity to reinvent themselves versus a time to hunker down and ride it out. That is a message healthcare leaders should heed. Garnering support to transform the culture of the organization or change the care delivery process may be easier in today's environment than it has been in years. Staff members are likely to be more supportive and willing to sacrifice their own agendas to help strengthen the organization as a whole.

Before making such big changes, executives should consider two factors:

  1. The grieving process. Employees may need time adjust to the new reality—especially if the organization is refocusing its strategic plan. Projects they held dear may now be off the table and they need to come to terms with that.
  2. Take a broad view. Employees from various parts of the organization should be included in the decision-making process, so they understand why certain choices are being made. Then senior leadership can proceed swiftly without having to rehash why they made a specific decision.

Don't let this recession pass you by. Tapping into this spirit of commonality may help reduce costs, improve quality, and propel your organization into an elite class of innovative healthcare institutions.

Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at
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