Hospitals May Need Operators, Not Innovators

I've heard lots of people lately decrying the lack of "innovators" among healthcare leadership. It's always hard to label a large group of people—no matter their position—as innovators, competent operators, or even nitwits, but healthcare CEOs as a group have not fared well when compared with innovators in other industries, where the reward for innovation is inarguably higher than it is in such a highly regulated industry as healthcare.

Let's leave out innovations in devices and drugs for a moment. The rewards there are still uncertain, but they're certainly potentially lucrative. It's rare to see hospital CEOs step up to the plate on matters of national policy involving patient care, payment mechanisms, and limiting waste, unless their well-being is threatened from an outside force like government reform or payer initiatives like pay for performance. Some of that head-down attitude is understandable. Running a hospital well has to be one of the toughest jobs out there. It's like running an industrial conglomerate without the huge profit margins those companies often enjoy. There's often little time to think outside the box when you feel like the box is getting smaller and smaller every day.

Hospital leaders have lots of good ideas to reform the system, but getting them past the entrenched bureaucracy that determines healthcare payment is often difficult and requires a lot more time and effort than they have at their disposal. As a result, most of the innovations I've seen in that arena have come from outside the acute care hospital sector.

So even if you agree that hospitals are often led by people who are more efficient operators than innovators, those people have strived mightily to achieve their position, and have achieved some measure of success in getting there. Getting to be a hospital CEO requires smarts and political skill, but not necessarily innovative ideas. With some good evidence, many people see healthcare CEOs as good operators with the hands they're dealt, but not really good at shuffling the deck to obtain a better hand.

But there's one problem with all this talk about lack of innovation at hospitals.

The whole argument starts from a presupposition that we need innovators at the helm of this nation's hospitals to help fix their myriad problems.

Do you agree? I'm not sure I do.

Innovations are often expensive. Maybe we're better off with people who are good at executing, but who are not necessarily idea people. With drastic healthcare reform proposals on the horizon, are we better off with a majority of operators versus innovators? It's possible we are. The industry is already the most regulated on the planet, and I include financial services in that assessment, even with recent unprecedented government intervention in that sector. As government works to further regulate healthcare, are innovators really what is needed? I'm not sure, but there are good arguments either way. With further regulation, I'm coming down on the side of the efficient operators.

So bring on the operators. People who can effectively navigate through bureaucratic hoops and chart a path to profitability without sacrificing patient care. Those are the people healthcare is going to need in the immediate future, where the line between surviving and thriving might live on the razor's edge.

Innovators need not apply.