NorthShore Skokie (IL) Hospital said it would eliminate 150 full-time jobs, or nearly 14% of its workforce in the next two months.
The move eliminates seven senior executives, secretaries, clerical support, and business office staff. The layoff is beyond some earlier moves to outsource some functions that had already been announced and comes after its purchase by a larger hospital operator.
There has been an ethical makeover under way within the medical device industry, a field that has been troubled by federal investigations and bad publicity over the volatile issue of frequently undisclosed financial ties between companies and physicians. And while there is little question that battles over how much companies, doctors and medical institutions disclose about their financial ties will continue, some experts on medical conflicts of interest see the rapid fall of resistance by most major companies indicates that a turning point has arrived.
There is plenty of discussion among the consumer-driven health crowd about where one's "medical home" resides these days. Is it part of an integrated delivery system or an institutional entity, such as a mission-driven community hospital? Is it a local doc in the box or urgent care center? Some even think a health information Web site, like WebMD, or an extended social network of family, friends, and experienced patients, could function as a medical home.
So what makes us, as consumers, seek out and want to have different solutions to meet our healthcare needs and provide that medical home? It could be our level of experience, lack of standards, or belief—based on the variability in the delivery of care—that there is no system in healthcare.
Or it could be that the current leaders in healthcare are not who you think. The "real" health leaders are not C-suite executives at your local hospital or physicians and caregivers—they are empowered consumers.
Today's health leaders are the moms and dads who are struggling to navigate the healthcare system. These consumers are doing their best to lead their family through crisis, chronic condition, and routine cold and flu without the benefit of a healthcare provider taking the lead to coordinate their family's care.
But is it really about coordination of care, or is about the lack of confidence that we as consumers have in the system? As consumers, we understand convenience, service levels, quality, price, and satisfaction of experience. We call this "value for money", and it's ingrained in everyone who makes purchases.The new C-suite—healthcare consumers—is searching for value in the care that they buy.
In the book, Redefining Health Care, authors Michael E. Porter and Elizabeth Olmsted Teisberg define healthcare value as "outcomes per dollar." Even though people can debate whether an outcome is experience, satisfaction, death, or a safety event, we can all agree that the "per dollar" part is really clear.
Everyday consumers make value judgments based upon what matters most to them. They do this with calling plans, travel destinations, and service ratings that help them make decisions. These new empowered consumers are the ones creating value by defining value. Today, absent anyone noticing, consumers will draw their own conclusions and vote with their feet and wallet.
Institutional healthcare leaders should get off the "quality is king" bandwagon and realize that enormous volumes of care are given daily that have minimal impact on quality or outcomes. It's not just about quality; it's about convenience, experience, satisfaction, preference, perception, and yes, it's about the out-of-pocket price consumers pay. When healthcare leaders get on the track and begin to follow the warnings from the Centers for Medicare & Medicaid Services that value-based purchasing is just around the corner, we'll finally start to hear how they are helping consumers find value. That is a community benefit that you can sink your teeth into.
So, how can institutional healthcare leaders better serve the new C-Suite (or consumers)?
Transparency: Develop a philosophy of transparency for performance reporting.
Value: Understand your value equation (outcomes per dollar) and publish it!
Metrics: Measure differences in price, convenience, perception, satisfaction, and outcomes. Adjust your service offerings based on what works.
Communication: Formulate a communication strategy that helps consumers understand the complexity of your offerings; then, streamline the message and publish it.
Be a Consumer: Spend a day as a consumer in your own facility—take public transportation to get there; walk into the emergency room and ask for care; ask the admissions department about the cost of basic services; analyze how helpful your employees really are, and poll other patients in the waiting room about their wait time and levels of confusion.
Delivering value is about the big picture—not just quality or good food or friendly staff. And if you don't think the current economy will put new pressures on your facility's value equation, think again.
John Morrow is a health ratings innovator who has spent his career helping hospitals, consumers and payers improve their value proposition by benchmarking performance. He most recently created the Hospital Value Index® with Data Advantage and was the founder of 100 Top Hospitals: Benchmarks for Success® while at HCIA (now Thomson-Reuters).
I still wish my husband and I could take back the decision to purchase that 1986 Oldsmobile. Its transmission died a month after we bought it, so it ended up sitting in our driveway with grass growing up around the tires. Fourteen years later, it's still a sensitive subject to discuss (or write about).
While that decision dinged our pocket book and was a major inconvenience, it was still just a car. When a hospital CEO makes a poor decision, the repercussions can affect employees, patients, and the community at large. I certainly don't envy their position or some of the decisions they'll need to make this year. For example, no CEO wants to downsize 50 people. And the realization eight months down the road that you need 10 of those positions back because they really were vital to the operation of the organization only makes that decision tougher to bear.
Usually CEOs have exhausted all of the alternatives when deciding to cut a service or lay off employees or close a facility. But perhaps the even more challenging decisions are the strategic choices made throughout the year. According to a survey by McKinsey & Co. that evaluated which decision-making processes yield the best results, only 23% of decisions were made in response to an immediate threat. The report, which surveyed 2,327 executives from various industries and regions, also found that decisions made without a strategic planning process were twice as likely to generate extremely poor results—more than a fifth generated revenue 75% or more below expectations.
CEOs tend to have a large role in both the most and least successful decisions, the report says. Given the current financial climate, I'd say there's no denying that CEOs are facing extraordinary pressure to make sound strategic decisions.
Pete Knox, the executive vice president of Bellin Health in Green Bay, WI, recently told me that one of the key reasons some healthcare organizations struggle is because they fail to view their core strategic missions like service, quality, growth, people, and finances as a collective group of strategies that require the same resources. "They tend to fragment that," he says. Unfortunately, that means each group is focused on their own priorities and driving that agenda. For example, the financial people want resources for financial priorities, quality people want to focus on regulations, marketers want to expand services, and so on. CEOs are getting hit from different angles and sources, Knox explains. "You have to make high-level decisions on where to focus time."
Knox says Bellin Health has five strategies that align with its mission and vision, and all five compete for the same resource pool. Even though the organization focuses some energy in each of the five categories, how much it allocates relies on a very high-level discussion. "We make some strategic decision about where we are as an organization, how we want to position ourselves, and where we need to focus energy," he says. "It is a very deliberate prioritization and allocation process."
Based on its findings, the McKinsey report offered three best practices organizations can use to improve their decision making.
Define the risk. Organizations should examine decisions through a detailed financial model that compares those risks to the risks of other projects in the organization's portfolio. Looking back and learning from past situations that are comparable is also advised.
Discussion is key. The report found that decisions initiated and approved by the same person generated the worst financial results. There was also a strong correlation linking financial success with clarity about who is responsible for the project and the involvement of that individual in the decision-making process. Other participants in the discussion should be included based on skills and experience, and that decision criteria should be transparent. Lastly, the decision should be discussed in relation to other strategic initiatives.
The organization should come first. Organizational goals should be placed above the business goals of individual units. Leaders should spend time building consensus among the different units of the organization.
There are many external factors that healthcare CEOs can't control, like government reimbursement, the new administration's policies, and the speed of the economy's recovery. But CEOs can ensure that all decisions have the proper analysis, resource allocation, management oversight, and strategic alignment with the organization as a whole.
Having those tools in place can help CEOs avoid the fallout of a poor decision—and the sting of regret.
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at cvaughan@healthleadersmedia.com.
Note: You can sign up to receive HealthLeaders Media Corner Office, a free weekly e-newsletter that reports on key management trends and strategies that affect healthcare CEOs and senior leaders.
Architects for the U.S. Department of Veterans Affairs and the Louisiana State University System have unveiled preliminary plans Thursday for medical complexes in New Orleans. The architects showed stakeholders various options with a common result: distinctly independent hospitals that appear to lack much of the "synergy" the participating institutions once touted. Speaking to preservationists and planners, separate design teams emphasized that the schematic designs are "preliminary," but some in the audience expressed surprise when comparing the early renderings.
St. Louis-area community health centers, a large chunk of the healthcare safety net that serves the uninsured and underinsured, have been strained by a major boost in business during the past year. The uptick comes as jobless rates spike and more people lose their employer-based health insurance. For the growing group that depends on the health centers, officials said, the increased demand could mean longer waits to get appointments. The financial strain could reverse some of the recent progress at St. Louis area sites toward keeping wait times down, they added.