Seven Signs You're Ready for Collapse

Maureen Larkin, for HealthLeaders Media, September 18, 2008

As the fall of financial giants Lehman Brothers and Merrill Lynch hit the news earlier this week, some of you breathed a giant sigh and said, "Thank God I work in healthcare."

Healthcare is infallible, right? Regardless of how bad the economy is, people will always need healthcare. People get sick no matter how much or how little money they have in their bank accounts. And we've all heard about how sick the baby boomers are and how much they'll need our hospital systems in the coming years. It's the safest industry out there—economically speaking.

Well, yes, and no. Healthcare organizations that are managed well, always strive for quality, and provide patients with a positive experience probably won't have to worry about their business drying up. But those whose focus is off will have to answer to more demanding consumers who want to stretch their dollars as far as they can.

This week I attended the National Association for Healthcare Quality's Annual Education Conference in Phoenix, and I found it slightly ironic that as stocks were tumbling Monday, I was sitting in on a session that talked about the collapse of American business and what it can teach us about healthcare quality. It was presented by Kristine Tomzik, RN, MSN, MBA, chief compliance officer for UCERA, an organization that supports research at the University of Hawaii Medical School. Tomzik based her presentation on the book, "The Seven Signs of Ethical Collapse" by Arizona State University business professor Marianne Jennings.

Like it or not, healthcare is a business, and hospitals face the same possibility of collapse that we've seen in America's financial institutions, Tomzik said. The difference, though, is that in healthcare there is more than money at stake. The harming of a patient can instantly change the fate of an otherwise successful healthcare organization.

But no human is perfect and all healthcare organizations face the possibility of a fatal medical error—today, tomorrow, or next week. That's why you must make sure your business is a strong one long before that error happens. That's where Jennings' list comes in.

1. Pressure to maintain numbers. At most of America's businesses, these numbers are financial, but in hospitals, it's usually outcomes that are the source of pressure. The effort to maintain them often prevents those working in the industry from looking at the bigger picture—including new solutions that will bring better outcomes.

2. Fear and silence. Employees aren't encouraged to speak up when there's a problem. When they do they are met with resistance from managers—or worse, indifference. Problems continue, creating a work force that is apt to become distracted by fear, silence, and frustration.

3. Bigger than life CEOs. Are you, or a member of your executive team constantly talking publicly about how great things are at your organization, when you're hardly there to see what's going on? Do you trust other executives to tell you what's going on in your hospital departments instead of getting out there and seeing for yourself? I've heard a lot of NAHQ attendees grumbling this week about how their CEOs don't know what's really going on at their organizations. Successful CEOs are tuned in to their organization—both the good and bad—and know when to admit there's a problem.

4. Weak boards. When quality data are presented to your organization's board of directors, how does it respond? Is the data presentation the last item on a packed agenda, greeted by glances at the clock and lazy yawns? Or does the board actively discuss the information presented to them, asking questions about outcomes and processes? Do board members suggest ideas for improvement? A strong organization's board must concern itself with not only financial matters—but those of quality as well.

5. Conflicts. How many times have you seen quality improvement initiatives derailed by a disagreement between individuals or teams of individuals? A leader of a strong organization will know how to work with those who have their own agendas and get by obstacles to provide patients with the best care.

6. Innovations like no other. Beware of those "brilliant" ideas that bend the rules slightly or go against what your organization stands for. A perfect example of this is Richard Scrushy, founder of HealthSouth, a system of outpatient rehabilitation facilities based in Birmingham, AL. HealthSouth appeared to be an incredibly successful system in the 1990s, growing at rates that most healthcare organizations only dream of. But after the organization's demise earlier this decade, it was discovered that Scrushy used his own methods of accounting to make system's numbers look better than they actually were.

7. Goodness in some areas atones the evil in others. If your hospital is transferring uninsured patients to another across town, but bragging about the money it donates to the free clinic up the street, you may have a problem. No amount of external contributions to the community, Tomzik says, can make amends for serious improprieties and schemes.

Leaders who have primed their organizations for success—regardless of economic conditions—won't recognize these problems in their organizations. Keeping your business healthy means paying attention to quality at every turn—from patient care to philanthropy—and never wavering in the mission to offer the best possible care.

Maureen Larkin is quality editor with HealthLeaders magazine. She can be reached at

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