Do Healthcare Executives Have It All Wrong?

Most healthcare organizations are doing one of three things: wait and see, developing new business models, or the middle in which they may try to do a bit of both–maybe try to contain costs, or expand into medical homes, but nothing to risky.

It is true that there is a massive amount of mergers and acquisitions, as well as consolidation going on in the healthcare space in the US. A few years ago there were well over 1500 healthcare systems. Today that is fast approaching only a couple hundred. Within the next 5-6 years it will be close to maybe only a 100 or so mega healthcare systems.

Again, I am not saying anything that most of us do not already know.

In my opinion, I think most CEO’s and healthcare executives are trying to position themselves and prepare for population management. As the Affordable Care Act (Obamacare) continues to promote the transformation of incentives for healthcare systems from fee for service (pay for more work) to fee for value (you get paid based on positive patient outcomes) the thought has been that of insurance companies, we need to spread our risk across as many covered lives as possible.

So this has pushed systems to begin to battle for hospitals, physicians, and clinics that are well established, are profitable (robust balance sheet), have share in the market place, and perhaps have a good infrastructure in place.

The thought has been,the more you grow, the further you can spread out your risk in the “new world.”

At the same time, as healthcare systems grow it gives them more leverage to negotiate reimbursement with the insurance industry. It allows for additional purchasing power of medical devices, consumables, and deeper discounts on the cost of running a healthcare business. The more hospitals and clinics you have the more opportunities for additional cost out projects and process improvement.

The thought is that everyone can become an Intermountain, Billings Clinic, Geisinger, or Kaiser.

That is left to be seen.

The problem is that in the rapid adoption of merging, there is a slower process of integrating cultures. Balance sheets may appear that all the finances are directionally correct, but as systems continue to be gobbled up and integrated into larger healthcare systems, it is the union of new process, and new cultures, that will ultimately decide if the mega-system will win or lose.

The faster a plan can be executed to  manage, transition, and shift the culture of people from the current organization into the new processes of the parent organization, the better everyone is set for success.

Ultimately most organizations begin with administration, but again, wrong move.

It begins with physicians and nurses. Identify champions, promoters, neutral, and those that are detractors as quickly as possible. Those that are neutral and you can move to the positive side of the spectrum, put a plan in place and do it quickly. Those that are promoters and champions, give them a platform to continue their leadership, champion programs, transition new processes, and to broadcast the success of their teams.

Then the difficult part. Identifying those that are detractors, understanding if you can move them to neutral, or if you just need let them go so both parties can move on to more productive cultures.

We like to place focus on process and technology to save costs, improve quality, and build access to care.

In the new world of mega-systems, it will be the people who write and articulate the stories of care that will determine the success.

Process and technology are the frameworks on how to write stories.

The ideas, the creative stories, and the artwork in healthcare will always come from people.

Be bold. Figure out what story you want to tell. Write it. Make pictures. Share your story.

Small stories will always out live megaphone messages.

As always, you can feel free to contact me at: CANCERGEEK@GMAIL.COM or follow me on twitter @cancergeek


#PtExp #PX #cancer #hcldr #hccosts #hcsm #stories #storytelling #lcsm #bcsm #hcmktg #mktg #storyteller #hcpt #consumerism #hcbiz #CX #UX #Bioethx

One response to “Do Healthcare Executives Have It All Wrong?

  1. There’s a huge issue with blending cultures. McKinsey & Company published a nice little compendium “Perspectives on Merger Integration” in June 2010. Ignore company cultures at your own risk!

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