It has become routine to see in various health care magazines, e-mails to leaders, and executive discussions on social media internet outlets, a listing of the ten top challenges that CEOs believe they are facing in the health care industry today. They often call this list the "what is keeping me up at night" list. Although the recognition of their current challenges is important for health system leadership teams and board members, just knowing them is not enough. To be successful in this extremely challenging and complex health care environment today, implementation of action plans is key. The recognition of this critical need to implement a successful road map to the future in order to address the disconnect between knowing and doing has driven the content of this book. Based on the less than positive performance, both clinically and financially, of many health care providers, it seems obvious that the implementation of successful action plans is sorely missing in many boards’ and leadership teams’ processes. The proof that such is the case lies in the fact that the yearly challenge list provided by a wide array of CEOs from small, medium as well as large complex health systems and across the broad health care sector has changed very little over the last decade. We hear and read over and over again about the lack of primary care providers, the declining inpatient volumes, the decrease in profitability, the variability in clinical outcomes, the lack of strong clinical integration and collaboration, and the fragmented care due to a lack of case coordination across the continuum. The authors of this book worked together since 1999 in leadership/governance/management challenges domestically and internationally. They predicted, decades ago, what most would never have dreamed could become reality in the health care world. It is their intent to help readers successfully lead their organizations through a transformational journey in the current turmoil in the health care industry.
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The Journey of Transformation
"Change is the law of life. And those who look only to the pastor present are certain to miss the future." -- John F. Kennedy
The Journey of Transformation
We are all on a journey. It never ends. Every day along this path there are transitions. Every step we take is a movement placing us someplace new.
Most transitions are incremental. Transitions can be so small that we may not even notice them. On the other hand, transformation can be monumental. It is far beyond a transition, and therefore, far more impactful. It is a major change. It is to become something else. Like the caterpillar to the butterfly.
Transformation can occur suddenly, or slowly over an extended period. Major transformations are all around us. They are a part of our lives, culture, values, country, organizations, employment and environments. If a major change happens relatively quickly it can be indelibly imprinted upon our minds. Sudden change is immediately realized as impactful. Incremental change, which is not so sudden and indeed may take years to be realized, can be equally impactful but may not be noticed. If we pause to look back and reflect, we are aware of the significance of the change. So, reflection, and even introspection, can be a valued aspect of understanding transformation.
An Indelible Transformative Moment in History
An example of this latter type of transformation occurred at the time of the assassination of President Kennedy. This egregious act was transformational in its own way. It was tragic, shocking and riveting. It was the end of the American Camelot. It was the beginning of a string of assassinations and murderous attempts at some of our most respected idols. It changed much about how we interact with our leaders. But, there was another transformation that occurred at President Kennedy's death. Media consumption.
Prior to the day our nation watched the black and white replays of Jackie enveloping a collapsed JFK in Dallas, or John-John's salute at his father's funeral, we tuned in to black and white newsprint.
Everyone followed current events from a newspaper. One of the authors of this book, Peter, had a grandfather who was a journalist, and taught journalism for 40 years. He was proud of the printed word. News had been shared this way for centuries, since the advent of the printing press. As Americans were glued to TV sets to understand the unthinkable, it was the beginning of the decline for newspapers. While his grandfather was a friend of television newscasters, he saw the new medium as simply an additional type of communication in the journalistic armamentarium. He missed the transformative impact of countrywide television broadcasts. He never saw the shift from regionally based communication to one more national in scope.
What happened that day in Dallas affected all Americans. And the world. It helped reshape how we not only received information, but also how we processed it and understood it. From a linguistics standpoint, network broadcasting helped diminish our regional differences in speech and language and interpretation. In short, television news helped to usher in changes to the national culture itself. For those born since the assassination of President Kennedy these changes are not a change; but they are-in fact- a transformative moment, a historical moment, now made into a new reality.
Change is a part of life. As important and as subtle as the shift to the TV screen may have been, transformational events have surrounded us; and they continue subtly as well as dramatically. TV moved from the airwaves to cable and now to the internet. The internet itself has transformed communication and connection to each other in countless ways, but particularly through what is called 'social media'. Changes are ever present ... and coming at ever increasing numbers and accelerating rates and frequency. From McDonald's first fast food diner to the advent of the "pill," we respond to our primal needs in ways that may have been considered alien to our ancestors. But we respond.
From the Flush Toilet to the Polio Vaccine
Medical care is no exception, and since the dawn of the 20th Century its evolution has been exponential. The changes in medical care are almost too numerous to mention. Most have been due to technical improvements in anesthesia, pharmaceuticals, surgical techniques and tools, vaccines and increased genetic understanding.
But, interestingly enough, more lives have been saved by two, now totally ignored albeit technical developments: the flush toilet and potable water. These advances are perhaps the greatest generators of health in this country ... if not the world. Today, our society takes clean drinking water and sewer systems for granted. The same with extraordinary medical treatments. We too are now taking these for granted. As a result, we believe we are invincible and modern medicine can save us from every calamity. A medical miracle system for some, but a costly quagmire for others. Unfortunately, most of us still have an acute disease mindset in a chronic disease world. We can "cure" acute disease but we cannot "cure" chronic disease; we can diagnose it earlier, slow it down and palliate the symptoms, but not cure.
Indirectly, this cultural shift in attitude may have contributed to the significant funds that have flowed into medical technology and medical research. The medical community shares some culpability for this cultural shift as characterized by the reliance on drugs versus lifestyle modifications. As Pogo said, "We have met the enemy and he is us."
Over the past several decades, there have been many transformations in the healthcare arena. Post WW II, driven by the Baby Boom, the Hill-Burton Act started a building boom in hospitals. Employer-based health insurance coverage followed and medical schools grew in number and size to support the need for qualified medical staff. The establishment of Medicare and Medicaid as major sources of payment for medical services was a significant milestone in the provision of medical services for the elderly and the poor. These two payment systems dramatically influenced how payment formulas developed for similar services, but different populations, by commercial insurance carriers. Structural changes to delivery systems (the alphabet soup of IPAs, HMOs, MSOs, PHOs, IDSs, etc.) in the 1970s and 1980s foreshadowed the focus in the next millennium on access, quality, lower costs and higher efficiencies.
Agents of Change
We at Royer-Maddox-Herron Advisors have seen a lot. We were successful because we learned to use every change to create advantage for our institutions. But, learning to manage the growing rulebook of health care in the U.S. is not sufficient. Later in our careers we paused long enough to look beyond our own institutions and take stock of the direction the world around us was heading. We discovered that it was spiraling in a different manner and direction than we had planned and imagined. We realized that our primary duty was not to extract advantage from every minor change in management, payment or technology, but to intentionally transform our organizations for long-term sustainability in a new environment. This had to be done to sustain and even bring increased value to the communities in which we lived and served. But, as we discovered, timing is everything: an organization can be derailed by moving too soon (the "pioneers" are the ones with the arrows in their backs) as moving too late.
Leading is more than just responding to events, opportunities and challenges. It is also looking beyond the exigencies of the moment. Leaders must recognize the drivers and events, from the very subtle to a maelstrom that will sculpt the future landscape. Leaders must foresee what implication the future may bring and make the hard choices necessary to ensure the organizational mission and purpose are sustained. Great leaders make these choices well before the need for them is obvious. Success comes to those who are prepared. Anticipatory intelligence and change behaviors are perhaps the most distinguishing marks of leaders who will be successful in any future environment. Couple these two characteristics with the willingness to abandon practices that brought past success and an organization will find itself blessed with a leader capable of leading it successfully into a new and dynamic future environment.
How does one prepare for a future that, almost by definition, is unknowable? How could a newspaper executive in the 1960s have been able to foreshadow events to prepare for the introduction of the television and the internet? Likewise, how can health care executives become agents of change to foresee dramatically evolving health care services? This book is designed to answer these questions.
The Current Reality
The American way of delivering health care and medical care is a complex array of services, agencies, approaches, and personal experiences. Medical care is primarily curative (for acute disease, accidents, etc.) and geared for a sudden onset of illness. The US hospital industry is great at "rescue medicine"! Now, increasingly, medical care encompasses continuing and chronic effects of illness. The majority of services provided in today's hospital are for chronic conditions. Yet, chronic services can be more efficiently addressed in less costly environments than in a hospital. The most effective approach to good health is not medical care at all: it's health promotion and illness prevention. And, it should therefore be obvious, that this is not the purview of the traditional hospital or health care provider. Hospital based organizational leaders need to pay attention ... the leadership and authority position now occupied by doctors and hospital executives will likely shift, albeit slowly, to those knowledgeable in illness prevention, health promotion and public health.
Acute care and chronic care, as important as they are for the people in need of them, have little to do with overall health. Let's face it; the most important aspect of any national model to improve health and wellbeing is the public health system. Any country is healthier with increased standards for proper food handling, sanitation, safety regulations, housing, immunization requirements, nutrition and health education. Today, Social Determinants of Health, a term that came from the book: Social Determinants of Health: The Solid Facts, is used to describe the many different social variables that influence health, including social, political, educational attainment, violence and employment status and economic standard of living. (12) Even with the knowledge that as much as 80% of health status is dependent upon the social determinants of health (13), most of the money and the attention still go to episodic and acute medical care, which is a small part of determining the health status of a community and an even smaller part of the overall health status of the United States. Institutions, organizations and health systems have been well positioned and successful over the past 100 years because of the power of modern medicine and the money that has flowed into its growth and influence. The winds of major transformational events are stirring and growing in strength. Fighting fires once they break out is important, but it is best to prevent them in the first place. A paradigm shift is needed and, we believe, is on the way.
Most organizations think of themselves as capable of handling whatever may come to them. Indeed, the past has shown this to be the case. Unfortunately in health care, institutional change comes slowly. Jay spoke recently at a national conference attended by thousands of the nation's senior healthcare industry leaders. It was his sad observation that little progress in creative response to challenge has occurred and he concluded that there is a vast void in anticipatory thinking among some leaders.
At this meeting, he noted an abundance of 'happy talk', in his words. Economic survival was the underlying theme. There was no mention of the impact of consumerism (something we identified in 2008 as a major transformational change which would grow and become a driving force). There was no mention of transparency and institutional responsibility to the communities in which the institutions were located. There was not even substantive dialogue about plans to improve real or perceived value (higher quality at lower overall cost). The two primary attention grabbers were formulas to maximize payment and a newly designed patient gown.
Nibbling at the Margin
To be fair, many leadership teams are exploring models that will position their health care organizations for a different future. Most of what is now going on, however, is repositioning for change that has already happened. Most are simply trying to adapt to the new rules of the game. The Patient Protection and Affordable Care Act (ACA) has redefined payment formulas, quality standards and access requirements for all providers. Additionally, the ACA now enables patients and consumers to have more influence. Interestingly, as valuable as the ACA has been in terms of reducing overall costs, improving access for millions of previously uninsured people and establishing higher quality standards, there exists a public perception that the law has caused too much turmoil, something the author Clayton Christensen would call disruptive innovation. Insurance companies positioned themselves to be successful in this new environment. And, there is now occurring a recognition that consumers have real opinions, real needs for improved care and a new sense of a voice and empowerment. Consumerism, as a major driver of change, has only just begun. More dynamic transformational efforts are required to fully address this growing force.
With all the changes that have affected health care institutions in the last few decades, most fit neatly into one of five categories. Sadly, transformation at the critical core is absent in each. There is little new or innovative. That said, they are valuable and we view them as somewhat helpful initiatives in order to position an organization for more substantive and meaningful transformation efforts that still will need to be made.
1. Improving Cost Efficiency. As we saw at the national conference, this is what leaders are constantly seeking. Efficiency. It is characterized by realigning workflow and joining group purchasing organizations to negotiate and get concessions to get better leverage contracts for supplies and pharmaceuticals. There has been a shift from inpatient to outpatient services and facility changes and restructuring has occurred to respond to this. Many traditional providers have spent a great amount of time implementing energy savings programs, returning to in-house provided services as opposed to outsourcing and, the old standby — reducing staff.
Pursuing efficiency has been driven by an overall sense of the need to stay viable. This has always been a value of any well-run organization; but now a bunker mentality has set in. Cost efficiency is important, but it is not a panacea. It is based on a very old management model of maximizing performance through mind numbing, repetitive actions and coordination of effort to leverage size and volume of services. Major health systems still pursue this approach. We believe in efficiency, but we also believe in adaptability and identifying and implementing new behaviors or structural changes to ensure long-term sustainability. Creative and innovative change processes are put in place and enabled by strong leaders unafraid of change. A more operationally efficient organization is necessary, but not sufficient.
2. Pay for Value. Many traditional providers have explored, and hundreds of them have implemented, Accountable Care Organizations. These organizations were identified as a part of the Affordable Care Act and are designed to be rewarded by being accountable for improvements in care and a reduction in cost. They are paid for compliance with predetermined measures of performance. Implementation of these ACOs is in itself a major transformational change. Why? Because hospital payment for services rendered are replaced by a new financial model moving from episodic accountability to geographic, comprehensive care and population-based accountability.
Excerpted from "Breaking Out Of The Health Care Abyss"
Copyright © 2017 Royer-Maddox-Herron.
Excerpted by permission of AuthorHouse.
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Table of Contents
Prologue — Caution: Turbulence Ahead, ix,
Part One: No Mission Impossible for Agents of Change,
Chapter 1 — The Journey of Transformation, 1,
Chapter 2 — The Barriers to Transformational Change, 20,
Chapter 3 — The Drivers of Transformational Change, 30,
Chapter 4 — The Future Health Care Landscape, 38,
Part Two: On the Road to Transformation,
Chapter 5 — Implementing Successful Transformation Strategies, 46,
Chapter 6 — Implementing a Strong Culture and Brand, 57,
Chapter 7 — Excellence in Governance, 71,
Chapter 8 — Competent Leadership, 83,
Chapter 9 — Teamwork, 92,
Chapter 10 — Effective and Efficient, 102,
Part Three: Beyond the Finish Line,
Chapter 11 — Lifelong Learning, 112,
Chapter 12 — Envisioning the Future, 119,
Chapter 13 — The Only Constant is Change Don't Miss the Boat, 134,