Two dozen outpatient clinics are to open at the new Los Angeles County-USC Medical Center, part of a decades-long effort to replace the hospital. The opening is the first step in a series of gradual moves into the new $1.02-billion facility, which covers 1.5 million square feet over the length of three city blocks and whose highest tower is eight stories.
Five years ago, hospitals waged intense bidding wars to fill nursing vacancies, luring nurses with huge signing bonuses, vehicles and vacations. Such efforts often only exacerbated turnover, spurring nurses to remain in jobs just long enough to claim the prizes before moving to other hospitals with better incentives. Instead, many nurses want better working conditions more than they do extra money. Hospitals now are responding by introducing technology to dramatically reduce paperwork, offering more flexible hours, reducing caseloads, paying for advanced training and giving them more authority.
Nashville-based Monroe Carell Jr. Children's Hospital at Vanderbilt will nearly double bed space at the hospital. About 200 new beds will be added to the current 205-bed, 616,785-square-foot facility. These include about 90 new pediatric beds, 65 obstetrical beds, and 40 neonatal intensive care beds.
An Illinois law designed to regulate hospital building and other health facility expansions undercuts consumer choice and weakens "markets' ability to contain healthcare costs," the U.S. Department of Justice and the Federal Trade Commission said in a statement. In the joint statement to an Illinois task force evaluating the merits of the state's so-called certificate-of-need law, the federal antitrust agencies weighed in with their opinions in advance of a hearing. In Illinois, the regulations are carried out by the Health Facilities Planning Board, but state lawmakers are evaluating whether the board and its rules are necessary.
Healthcare leaders need to reinvent the C-suite and establish a new set of leadership skills to help them address the challenging nature of hospital-physician competition and collaboration. These new management core competencies or the "seven Cs" are:
Physician-hospital competition is a nationwide issue that affects how hospitals and physicians relate to one another. Without a clear basis on which to proceed, your organization will flounder and shudder in the face of unmanaged competition. The following are strategies and tools to employ in this potentially volatile arena.
For instance, a solid conflict-of-interest policy that encourages full disclosure goes a long way in helping medical staffs and hospitals achieve the goal of figuring out how to collaborate and compete. A good starting point is to understand the myriad ways in which conflicts of interest can occur. Some of these include:
Physician-physician conflict:
Competitors performing peer review
Credentialing/privileging disputes
Physician-hospital conflict:
Leadership position at a competing hospital
Competing ambulatory services
Physicians in joint ventures with other hospitals
Physicians who are loyal to other hospital staffs
Medical staff leadership roles (e.g., vice president of medical affairs and paid chairs)
Physicians as governing board members
Physician group conflict:
Employed physicians
Exclusive contracts
Medical directors
CEO's "kitchen cabinet"
Joint-venture partners
Contracted services
Physician's personal conflict:
Personal relationships
Religious issues
Families/relatives with related or competitive interests
Physicians involved in competing or similar research
Ethnicity issues
Ownership or interests in device manufacturers
In recent years, hospitals have developed various strategies for handling competition from physicians. Some have pursued joint ventures for ambulatory services or opted to build service lines to try to force competitors out of the marketplace. Hospitals that pursue these options often deny medical staff membership to physicians with competing interests. Other hospitals prohibit physicians with competing interests from serving in leadership capacities. This is generally addressed in an economic credentialing policy adopted by the board.
Managing conflict
The way an organization handles conflict is often determined by its culture. Some cultures view every conflict as an opportunity to crush the competition through belligerence and bullying. Others are characterized by thoughtful responsiveness, sensitive to the feelings and concerns of others. A good starting point is to know your organization's style and then objectively analyze whether the strategic results are what you wish them to be.
Many organizations have little self-knowledge or recognition of their style. If we accept that conflict is a huge growth line in contemporary healthcare, then best practice is to design and implement a conflict management system.
In their book Designing Conflict Management Systems, Cathy A. Costantino and Christina Sickles Merchant state that there is a spectrum of alternative dispute resolution options that range from least invasive (those that allow disputants the most control over the process and outcome, such as negotiation) to most invasive (those that allow disputants the least control over the process and outcome, such as binding arbitration). What might such a progressive system look like for a medical staff and hospital?
Elements to consider, in ascending order of invasiveness, are:
Prevention, which includes partnering, joint venturing, consensus building, setting expectations and rules, and joint problem solving. The physician-hospital compact, defining the give-and-take between physicians and hospital, is an excellent practice in this space.
Principled negotiation to seek collaboration by separating people from the problem, focusing on interests and not positions, inventing options for mutual gain, and insisting on using objective criteria.
Facilitation by using mediation, principled negotiation, and conciliation.
Fact-finding mediation using a neutral expert.
Advisory ADR using results of early neutral evaluation and nonbinding arbitration.
Imposed settlement, such as binding arbitration.
Legal remedies (only if all else fails).
Influencing culture
Culture is extraordinarily powerful and has the potential to undermine any leadership efforts and improvement. Recent literature addressing organizational culture has recognized that truly effective cultures must simultaneously embrace and balance interdependent opposites, sometimes called polarities. Common polarities seen in contemporary medical staffs include:
Collegiality and excellence
We all want to work in an environment that is high on collegiality. Physicians appreciate working within a medical staff in which their fellow physicians work and play well together. Collegiality helps increase the social capital of a group or organization. This social capital is critical for providing the grease that allows smooth relationships and interactions within the medical staffs. In short, people who play together have a more difficult time fighting.
Freedom and commitment
Physicians need the freedom to make choices about how to spend their time-on their practice, with their families, and on personal pursuits. This creates a dynamic tension that applies to physician participation in the organized medical staff. In this context, freedom means each physician's right to make individual choices concerning how to balance their practice, home, leisure time, and medical staff responsibilities. Each physician is autonomous and free to make these choices as he or she sees fit. Increasingly, medical staff members are opting to spend less time involved in medical staff activities or carrying out the board-delegated responsibilities of contemporary medical staffs. In many organizations, this absence of commitment and leadership has led to a crisis situation.
Appropriate independence and mutual accountability
Appropriate independence is critical for the practice of good medicine. All physicians value the right to provide care to their patients as they deem appropriate for each case. Appropriate physician independence in the practice of medicine is an absolute requirement for physicians to exercise their clinical judgment and skills in the best interests of patient care. By virtue of training, experience, board certification, and undergoing rigorous and ongoing determination of current competency, physicians exercise their privileges to ensure quality patient care. This is consistent with the fiduciary responsibility of the physician to his or her patient.
Appreciation and continuous performance improvement
We often fail to appreciate the excellent care physicians are providing already and the sacrifices they are making-attending patients in the middle of the night, dealing with angry patients who threaten to sue, and then coming in the next morning and doing it again. Who is saying "thank you" in your hospital? If physicians only hear from their medical staff about how they can improve, without being appreciated for the hard work and excellent care they are already providing, you won't have a healthy balance between appreciation and continuous performance improvement.
Once physicians feel appreciated and honored for the excellent quality of care they already provide, they are far more likely to accept constructive feedback and improve their care over time. In this sense, a medical staff culture that embraces appreciation and continuous performance improvement is more likely to be an effective medical staff.
Stability and change
Culture is not changed easily and requires strong leadership. Leaders must espouse new beliefs and values, often in mission, vision, and value statements. Leaders must walk the talk and lead by example. They must be great communicators and reach out to fellow physicians to communicate about the new culture and the reasons for change. Leaders must also build strong social capital and respect to facilitate the necessary culture changes.
Cultivating influence
A fundamental principle underlying cultivating influence is that we are often interested in far more than we actually control; however, if we do well with what we control, we are able to increase our influence on things in which we have an interest but no control. Medical staff leaders should understand this dual role and responsibility of the medical staff. This principle applies to all parties. What is the sphere of control of the organized medical staff? First and foremost, it is their board-designated responsibility to monitor and improve the quality of care that is primarily dependent on the performance of individuals' granted privileges.
Because of this, physicians on your medical staff are accountable to each other for the quality of care they provide. This is a given. This is the sphere of control of the medical staff, namely how credentialing, privileging, and peer review are conducted in the organization.
But the medical staff is interested in many other things, including hospital operations (e.g., staffing, cleanliness, timeliness, availability of services, and competency of staff members) and the board-directed strategic development and initiatives of the hospital. To expand our influence, we must begin by doing what is in our sphere of control. Do what is in your sphere of control well, and your influence will expand. Don't do what is in your sphere of control well, and your influence will shrink.
Will your organization be characterized by unmanaged competition and war or extortion and capitulation, or will it be an organization dedicated to collaboration and ensuring physician and hospital success? Sailing the seven Cs offers a step-by-step approach to realizing the latter.
Hospital boards aren't known for being the most engaged and active. And many are not prepared or equipped to adequately perform their duties as trustees of the organization. Historically, hospital board members served as a link to the community and their primary function was to secure resources for their hospitals to operate. Then, in the 1970s, court rulings found hospital boards legally accountable for the fiscal management and quality of services delivered. That served as a wake-up call for many CEOs and hospital trustees. The advent of the DRG system in the 1980s, increased competition, consumer-driven healthcare, and a push for hospital transparency, further demonstrated the need for governing boards to be actively involved—not only in fundraising and community relations efforts, but also in setting the direction of the organization, establishing goals, and holding hospital leadership—and themselves—accountable for the hospital's performance.
Great strides have been made on this front in the past 30 years—and yes, there are even some hospitals that are taking the lead. I have spoken with a few. They are changing their governance structure, enhancing board education, seeking out board members with expertise in areas like finance and quality, and adding rigorous oversight measures. Still, the vast majority of hospital boards is struggling to keep up with the challenges of running a healthcare organization in today's market.
One of the first steps to improve the effectiveness of your hospital governing board is to figure out what you are working with. What are your board's strengths and weaknesses? A recent study conducted by researchers at the Health Research & Educational Trust, aims to help senior leaders and trustees do just that. The report, An Empirical Taxonomy of Hospital Governing Board Roles, surveyed 1,334 hospitals and placed their governing boards into five categories based on their level of involvement in key areas of governance—mission and strategy setting, performance evaluation and oversight, and external relations. The categories are:
Strategic active boards. Focus on setting the mission and strategy. These boards tend to have a relatively small number of trustees and operate in hospitals that are small, located in poor or rural areas, and have a high level of public ownership. This group represented 143 hospitals.
Evaluative and strategic active boards. Focus on mission and strategy setting, and evaluation and oversight. These boards tend to operate in urban facilities. This group (303 hospitals) also had the lowest number of hospital beds per thousand people.
Balanced active boards. Undertake all three roles—mission and strategy setting, performance evaluation and oversight, and external relations—with a relatively equal emphasis given to all three. These hospitals tend to be larger, system/network members, or teaching institutions. They are usually located in urban areas, have the highest per capita income, and the highest level of hospital competition. This was the largest group representing 564 hospitals.
Strategic active and external boards. Focus on mission and strategy setting, and external relations. These hospitals tend to be larger, most likely nonprofit organizations, and/or teaching institutions, and they operate in areas with a high per capita income and high levels of medical or hospital resources. This group represented 239 hospitals.
Inactive boards. Have a low level of activity in all three roles. This group represented only 85 hospitals, which tended to be the smallest hospitals and were most likely located in poor or rural communities, and had the lowest level of competition and physician supply.
This study helps provide a common language for CEOs and trustees to evaluate themselves, says Shoou-Yih Daniel Lee, PhD, one of the study's authors and an associate professor of health policy and management at the UNC School of Public Health. "You can look at the study as a mirror that could be put in front of hospital governing boards for them to know what they look like, and then to assess if they like what they see in the mirror. If they don't like [what they see], then maybe it can help them think about ways to change their image, to change their activity, to change their function," says Lee.
So which of these five categories yield the best performing hospitals—surely, the balanced active board, right? Well, that may not be the case and more research is definitely needed, cautions Lee. Hospitals have different missions, environmental challenges, and regulations. For example, some hospitals are serving a very disadvantaged patient population, and their board may need to focus more on external relations and reaching out to those patients than a hospital that serves a very affluent community. Governing boards and the administration should first determine what is the mission and focus of their hospital, and then they should build the board around those ideals, says Lee. "There should be some level of consistency between what the hospital is aiming to do and the function and activity of the board."
Still, I would argue that every board needs to have a strong evaluation and oversight component. And while most would agree with me, many experts say that it is easier said than done. Hospitals may not have the manpower, know-how, or resources to effectively focus on all three roles and maintain a high level of activity in all of those areas. Something has to give, they say, and in some cases it's the oversight role. But I'm not convinced that this is the area you want to skimp out on, especially since the governing board's responsibility—not only in areas of finance, but quality, as well—is coming under increasing scrutiny.
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