Tuesday, November 27, 2007

Physician Leadership – A Necessity for the Future

Many people throughout my career have asked me if all health care leaders should eventually be physicians who have moved into administrative roles. My answer to this question has always been, and will likely continue to be, “No.” That doesn’t mean, however, that I don’t believe an increasing number of health care leaders should be physicians or other clinicians. The key, however, is not in their clinical background, but whether they have actually developed the core competencies to become capable leaders.

It is clear that the additional knowledge that clinicians--including physicians--bring to the leadership table because of their health care experiences at the bedside or in the exam room is extremely valuable, particularly in determining what creates the best care management outcomes. However, if this knowledge is not combined with the core competencies of leadership, many of which have been discussed in prior blog posts, this knowledge is often worthless. In fact, with clinical expertise often comes an arrogance which is a barrier to good leadership.

Hence, it is my belief that physicians and clinicians make great leaders if they can develop the necessary competencies, and that more of them who have these competencies are needed.

To be a physician leader, one must be extremely comfortable with the “grey areas” that exist in administration because every decision in health care is not black or white, and the pros and cons must be evaluated in each case to make sure the correct administrative decision is being made. However, physicians have this capability, for we are constantly faced with identifying a list of differential diagnoses for each patient so that we have alternatives to consider if our primary diagnosis proves to be incorrect.

In addition, physicians must be extremely comfortable with change, although for many this is a struggle. However, I believe that most physicians, like myself, have had to learn to utilize new technologies over the years. For example, the open subcostal surgical procedure I did for gallbladder extraction in the past is totally unacceptable today, and if surgeons who trained in my generation could not adapt to this new technology and laproscopic procedure, they actually cannot be practicing in 2007.

And finally, physician leaders must be extremely comfortable with making difficult and tough decisions, particularly if they are in the “grey area” mentioned above. However, once again, I would propose that physicians in their clinical practices are making tough decisions on a quite regular basis.

So, in summary, I do believe that physicians make excellent leaders if they can develop those additional competencies as mentioned, and constantly reflect on the similarities between clinical decision-making and leadership decision-making. It is clear to me that more physician leaders will be sought in the future, because all organizations are putting more emphasis on improving quality of care. Outstanding physicians are well-prepared and best positioned to bring the knowledge of how to accomplish excellent quality to the table.

Second, all organizations like CHRISTUS must eventually go on a journey to excellence similar to the one we have been undertaking for the last eight-and-a-half years. Physician leaders understand the need for a balanced scorecard, which is learned by balancing the patient’s quality of life with his or her quantity of life. Our balanced score card requires us to focus on the simultaneous improvement of four areas: clinical quality, service delivery, business literacy and community value.

Third, excellence must be seen as a necessity, not as a luxury. I believe that physicians understand this, and for the most part, understand each day that they have an awesome responsibility to care for patients’ lives and therefore truly understand what I mean when I say that we have been called to do sacred work.

Fourth, a positive alignment between physicians, hospitals and health systems is key today to overcome the negativity which has been caused by increasing governmental regulations and the polarity of reimbursement between physicians and hospitals. Physicians will listen to many people, but will most intently hear what other physicians are saying, and therefore, physician leaders become critical in this physician alignment process.

Based on the knowledge and understanding garnered from many years as a physician leader, I would reiterate and stress that although non-physicians are key and critical as part of leadership teams, the future of health care will be enhanced if physician leaders can not only increased in number, but can be integrated with present leadership teams to maximize their effectiveness in reaching all the goals which are central to a journey to excellence.

Tuesday, November 20, 2007

Giving Thanks

As we approach Thanksgiving, I am sure we are all most thankful for our families and friends, the loved ones who support us each day as we continue on life’s journey. However, for those of us in health care, I am sure that a close second on the list would be our thanks for being called into health care and the ability to serve those in need. However, as in any profession, our work has its share of clouds and sunshine—there are successes and failures, and there are opportunities and challenges. Those of us who work in health care, physicians, nurses, and all the support teams including the people who park our cars, cook our food and keep our patients’ records, we must demonstrate a continuous positive outlook and be resilient when challenges loom ahead.

How do we create this optimistic outlook and the ability to climb the highest mountains and run the most difficult marathons? First and foremost, we must celebrate our incremental victories.

As I have observed the health care industry for over the last 40 years, I have come to believe that health care improvement is never linear, but rather is incremental, with the slowest improvement seen in the earliest part of the initiative. Consequently, frustration can occur when we pause and evaluate just how little progress has been made over an extended period of time. But knowing that a tip-point will be reached when improvement will be accelerated gives one the ability to pause when each incremental improvement is made--however small--to celebrate what I have called the “incremental victory.” It is in this celebration, whether it be a mere thank-you note, an ice cream social, or a pizza party, that our Associates and physicians will find the energy to journey to the next success point on the improvement schedule.

Secondly, our resilience must come from reminding ourselves each day that we are doing sacred work. Our work is not necessarily sacred in the sense of religion, but sacred in the sense that every day, people turn their lives over to us. Knowing that people have put their most precious gift into our hands—the life of their child, mother, etc.— means to me that they must trust us explicitly. This knowledge should energize us and create in us a total commitment to our ministry and to ensuring that every miracle moment that we create for our patients and residents is of the highest quality possible.

Third, we should be creating for our Associates and our physicians the very best place in which to work. This means that we should be providing to the best of our ability, the latest equipment and knowledge to help them carry out their work as effectively and as efficiently as possible. But even more important, we must be hiring and retaining the right Associates and physicians—those who have a strong commitment to our mission, vision and values and who prioritize teamwork over individual performance.

Yes, this Thanksgiving is a time when we can express sincere thanks for being called into the health care profession. We are doing sacred work, we can create incremental victories and we can be a strong member of a team that ensures that the trust which our patients and their families place in us each day is well-deserved. And hopefully, they, too, will be giving thanks that when they needed help, they discovered CHRISTUS and its people.

Wednesday, November 14, 2007

The Role of Partnerships in Health Care Systems

Last week, CHRISTUS Health announced that we have signed a non-binding letter of intent to form a partnership with St. Vincent Regional Medical Center, the largest provider of health care in Santa Fe, N.M. It is our hope that as a result of due diligence, which is presently being performed, that the partnership agreement and the transition to CHRISTUS leadership and management can occur on or before Feb. 1, 2008. For the readers of this blog, this report should probably elicit the following questions: 1.Why would St. Vincent regional medical center want or need a partner? 2.Why would CHRISTUS Health want to enter a new market? 3.Are partnerships rather than total ownership a viable option for expanding health care in the future?

In addressing these questions, let us begin by briefly reviewing an article published in Trustee magazine in September of 2007 entitled, “Standing Alone: Assessing a Hospital’s Long-Term Viability”. This article begins with the statement, “The trend of the past decade is clear: Hospital-health system affiliations are up, and the number of independent community hospitals is down. In 2005, 55 percent of hospitals were part of health systems, up from 46 percent just five years earlier.”

This article continues to indicate that stand-alone hospitals may be challenged because of economic changes occurring in their markets, stronger competitors competing in their markets and, therefore, the challenge of generating sufficient operational margins to support their capital needs. In prior blog posts, we discussed that from our future planning, we learned that declining reimbursement and the need for new, non-invasive technology would be the drivers of the health care of the future. Both of these trends require a new approach to obtaining capital funds. It is this knowledge and understanding that drove the St. Vincent Regional Medical Center board and its leadership to contemplate the need for a partner at a time when they are the sole community provider and are fiscally sound. Their timing is critical, for many stand-alone hospitals wait far too long to review a potentially innovative and new strategic direction, and consequently are often facing significant cash-flow challenges approaching bankruptcy levels. In this wounded state, it is much more difficult to find a viable partner or a workable strategy. Such was the case reported recently with a hospital in New Jersey that has been unsuccessful in obtaining a partner after a two-year search, and have reported that their doors will be closed before the holiday season.

So specifically, St. Vincent Regional Medical Center decided that they needed a partner to ensure that access to appropriate capital would be available in the future, but they also agreed that being part of a larger system would give them exposure to best leadership and management practices and also best practices in regards to quality, service and community health delivery.

By utilizing that criteria, St. Vincent did a national search and determined that CHRISTUS Health was its best partner opportunity. Because the management expertise in CHRISTUS was also deemed as a positive contribution to the partnership, St. Vincent has agreed to sign a management contract with CHRISTUS so that their leadership team will in fact become CHRISTUS Associates and fall under CHRISTUS management.

Once the partnership agreement is signed, I will highlight more specifically our other partnership characteristics in a future blog post to give you a better understanding of one workable model for a partnership in American health care. We will also discuss at that time other partnerships which CHRISTUS has undertaken and do a contrast and comparison of those models along with the full ownership model, which is how we predominately operate throughout our system.

With regard to what’s in it for CHRISTUS, in our strategic planning process over the last 8-and-a-half-years, we have determined that to be an excellent organization, we need to be growing and expanding our ministry through a number of models, not solely through acquisitions. Therefore, we formed a partnership with Baptist St. Anthony’s Health System in Amarillo, Texas in 1998. We followed this with the Mexico partnership with the Muguerza health system in 2000, and hence began a formal partnership journey within our system. To eliminate the need to examine each partnership independently, we developed guidelines for such partnerships as a result of our decision to expand our portfolio to become one-third acute care, one-third non-acute care and one-third international.

For our acute care ventures in the U.S., we have indicated that we will only partner with organizations having the following characteristics:
1. Similar mission, vision and values;
2. Located in organically growing communities (i.e., new populations are entering the community);
3. Surrounded by geographical areas which are in need of expanded health care;
4. Located outside of our present markets, many of which are in the hurricane belt and
5. Markets which have stronger business literacy so that we might have more resources to care for the growing uninsured.
With these criteria in mind, we answered the invitation to begin discussions with St. Vincent, which as indicated, ended in CHRISTUS being chosen as their preferred partner.

With regard to the final question, partnership vs. ownership, regardless of the financial viability of any organization in health care, capital requests and appetites always exceed capital capabilities. Therefore, partnerships permit an organization to expand its ministry--particularly if it provides high-quality care--to new areas while not being required to provide all of the capital itself. So growth with less capital is possible. Hence, introducing partnerships into your expansion portfolio seems appropriate, provided that at the end of the day, your partners look as much like you as possible.

Wednesday, November 7, 2007

Transformational Leadership: Changing Ahead of the Curve

The average life span of Fortune 500 Companies is 40 to 50 years because many do not embrace transformational change ahead of the curve. Organizations that will stand the test of time will require innovative leaders who are able to change ahead of this curve.

This is most important in the health care industry, as more affordable health care will not come from an injection of more funding, but rather from innovations that aim to make more and more areas of care cheaper, simpler and more accessible to our patients.

This will require not only innovation, but resilience as well. Resilience is the ability to bounce back from difficult or challenging experiences, manage pressure and adapt quickly to change while continuing to produce excellent results. Luckily, this trait can be learned and improved over time. I believe the four characteristics of resilient leaders are the abilities to:
1. Accept reality
2. Find meaning in difficult situations
3. Make plans for a better future and
4. Improvise quickly to solve problems

As we prepare to change ahead of the curve, we can no longer benchmark ourselves against our historical progress or our peers, but instead must know our new competitors like technology vendors and retail providers such as CVS, WalMart, etc. We must become increasingly skilled at predicting the toxic side effects of change, and become more comfortable with the controversy change can cause if we are truly to take our appropriate place in the future we are predicting to provide the highest quality care in the most convenient ways possible.

To become truly transformational leaders, we must embrace five key mindsets.

Mindset #1 is maintaining the right balance between market–making and disciplined execution. This is not an either/or, but a both/and mindframe, and will require flawless execution balanced with our future thinking (3 year planning, 10 year plans, our Futures Task Force). To develop this mindset, a leader must avoid false tradeoffs and commit to a dual focus on the present and the future.

Mindset #2 is obsessively identifying and multiplying talent. We must always be on the lookout for new talent and support our leadership training so we continue being a talent multiplier. To develop this mindset, a leader must invest a disproportionate amount of time in recruiting and developing people.

Mindset #3 is the commitment to continuing to use a selective scorecard to measure business performance with rising benchmark scores. We must continue to support total transparency, including our quality data, financial information and community benefit numbers. To develop this mindset, a leader must rely on simple, memorable ways of measuring success and use every occasion to share those success stories across the organization.

Mindset #4 includes continuing to recognize technology as a strategic asset. Our clinical performance, business strategy and IT strategies must converge, and we must carefully and thoughtfully evaluate our adoption of new technologies in a timely manner. To develop this mindset, a leader must invest in technologies that will demonstrably lead to better business performance.

Mindset #5 is an emphasis on continuous renewal and “must haves.” Leaders must be continuously alert for our own competitive softness and vulnerability, always be on the lookout for new market opportunities, demonstrate fierce pride in their organization’s history and articulate its relevance to a rapidly changing future. Storytelling is important to lift spirits, raise expectations and talk about the pain that accompanies change. A leader must put in motion the powerful mindset of continuous renewal so it becomes the self-sustaining engine for innovation and better ideas. To develop this mindset, a leader must ensure that everyone in the organization understands what to preserve in their current way of doing business and what to do away with.

Our greatest challenge as CHRISTUS leaders is that we must get 30,000 full- and part-time Associates and 6,000 physicians, in multiple countries from multiple cultures, to think in similar terms about the purpose of our ministry and what they individually must do to accomplish that purpose and be aligned. We must all share the same mindsets. We must believe nothing is impossible.