Rapid change is engulfing health care across the United States, but the strategic responses of organizations to these changes are sharply divided. In the shift that has been broadly shorthanded “from volume to value,” many organizations across the country are deeply engaged in moving toward “value” by building new partnerships, affiliations, capacities and economic structures, striving to bring better health and health care to more people for less money.
At the same time, some organizations are using the chaos and fluidity of the moment to double down on the old way, aggressively seeking greater volume reimbursed at higher rates. For now, within their regions, some of these organizations appear to be “winning” at the game, building greater market share and margin and increasing their budgets. But is this in fact the wisest strategy to follow in the long run, not only for their institutions but for the good of their missions and the people they serve?
Moving toward Value
Virtually all serious attempts to answer the question, “Why do we pay so much more for health care in the United States?” have pointed to the competition for reimbursements under a commodified, insurance-supported fee-for-service system. If what you pay for is items off of a list, what you will get is lots of items, especially the more profitable ones. That’s how we end up with a system in which waste (stuff we could simply do without) is pegged by repeated studies at one-third or higher.
In recent years, Parkland Memorial Hospital in Dallas, Texas has faced intense media scrutiny and government investigations into patient safety lapses. As the hospital searches for a new CEO, the Dallas Morning News asked me and other experts to answer the question: “What kind of leader does Parkland need to emerge as a stronger public hospital?” Below is the column, re-used with the newspaper’s permission. While it is focused on one hospital, the themes apply broadly. The type of leader that I describe is needed throughout health care.
Public hospitals such as Parkland are a public trust, serving the community’s health needs by providing safe and effective care to a population that lacks alternatives.
Major shortcomings in the quality of care provided at Parkland have eroded that trust. Now trust must be restored. The community is counting on it. It’s literally a matter of life and death.
Parkland’s board is searching for a new CEO to lead this journey. The CEO’s task will not be easy: Resources are tight, resident supervision is insufficient, staff morale is low, systems need updating, and preventable harm is far too common.
History may provide some guidance. Historian Rufus Fears notes that great leaders – leaders who changed the world – have four attributes: a bedrock of values, a clear moral compass, a compelling vision and the ability to inspire others to make the vision happen. Parkland needs one of these great leaders.
The many challenges in healthcare today require great leadership. Access, affordability and quality are just a few of the overarching issues that call for and, in fact, demand great leadership from within healthcare.
Traditionally, the criteria for a physician to advance to a leadership position have included academic and/or clinical accomplishments, rather than the distinctive competencies needed to lead. Furthermore, traditional physician training and the unique characteristics of physicians — we tend to value autonomy and, outside of structured interactions (such as the operating room or intensive care unit), may have poorly developed team reflexes — can handicap developing leadership skills.
Though developing great leaders and embracing change are well-established characteristics of frontrunner organizations in many industry sectors, healthcare organizations have generally lagged behind. What’s more, many healthcare organizations are structured in silos or “fiefdoms,” which represent a challenging environment in which to lead. Only recently are healthcare organizations awakening to the importance of developing physician-leaders and, in this context, offering physician-leadership programs.