I have recently mentioned CHRISTUS’ experiences at the top of the mountain and the bottom of the valley in a period of two-and-a-half months. On one hand, we successfully separated conjoined twins at CHRISTUS Santa Rosa Children’s Hospital, while on the other we experienced a heparin incident in our NICU at CHRISTUS Spohn South. We talked about the importance of an organization on a Journey to Excellence being able to successfully experience and address those issues in the valley, and through those learnings, gain the knowledge and expertise to move toward the top of the mountain once again.
We predicted that other valleys would present themselves to CHRISTUS Health as we continued our Journey to Excellence for the next 10 years of our history. Indeed, such was the case five days ago when Hurricane Gustav directly aimed itself to several of our hospitals in the Gulf Coast region.
Just as we experienced in Hurricane Rita several years ago, we had to evacuate four of our hospitals in the direct line of the storm: CHRISTUS Hospital - St. Elizabeth in Beaumont, Texas; CHRISTUS Hospital - St. Mary in Port Arthur, Texas; CHRISTUS Jasper Memorial Hospital in Jasper, Texas and CHRISTUS St. Patrick Hospital in Lake Charles, La. In addition, we had to determine the potential consequences of the after-effects of the storm on our hospitals in close proximity, including CHRISTUS St. Frances Cabrini Hospital in Alexandria, La.
Because we are an organization that debriefs after our valley experiences, we learned a great deal from the challenges which Rita presented. Therefore, this time we were much better prepared both at the system and regional level, because our Risk management department has since made efforts to improve our disaster preparedness throughout the U.S.
Consequently, all of our regions, including Mexico and our newest region in New Mexico, participated in system-wide conference calls and made themselves available to take evacuees from the affected regions and to also provide supplies and staff as requested.
The affected regions were able to evacuate their patients smoothly and in an orderly fashion, so when the storm reached its peak, we had few or no patients in the four campuses that were in the line of the storm. However, all of these four campuses agreed to keep their Emergency Departments open and operational so that they could continue to serve their communities.
What leadership skills are necessary and were demonstrated to help us successfully walk through this most recent valley? I believe that there are seven critical skills to highlight.
First, organizational skills. All hurricanes and most other crises in valleys naturally create chaos and disarray. Our leaders demonstrated the ability to minimize this chaos and create plans, next steps and to-do lists which resulted in hour-by-hour plans that accomplished the goals which had been outlined several days before the hurricane hit.
Second, analytical skills. It is clear that every problem or issue during such crises cannot be identified in advance, and our leaders demonstrated their ability to quickly analyze the problem, create a rapid solution and implement it promptly.
Third, team building. Because crises such as hurricanes play out over a prolonged period of time of (often four to six days), one small group of people cannot provide the leadership which is required to come through a crisis successfully. Therefore, the breadth and depth as well as strength of team is vital during this period of time, so that several sub-teams can be assigned to work and then rest, rotating with other teams that will do this in reverse. Great team-building during Gustav was demonstrated throughout the CHRISTUS system, both in the U.S. and internationally.
Fourth, innovation. Unfortunately, during crises, some routine solutions do not address the issue successfully, and therefore the ability of the leadership team to innovatively think of new and potential solutions rapidly is essential. There were many examples of innovation during our recent crisis, including cross-staffing and opening up a daycare center with the faculty from our school-based health centers as two examples.
Fifth, flexibility. Traditional roles and responsibilities often do not suffice and create success during a crisis; therefore, all members of the leadership team must be flexible to do whatever is necessary to address the urgent challenges they face. Clearly, during a crisis in a valley, the responsibility at the end of each of our job descriptions, “other duties as assigned” should probably become the lead responsibility during this period of time.
Sixth, optimism. Walking through valleys like living through hurricane Gustav is a devastating experience under the best circumstances. Often, whatever can go wrong does go wrong, and occasionally even the best thought-out plans to address the issues are not successful. However, if leadership becomes discouraged, they will then become ineffective, and all the best-laid plans will quickly deteriorate, adding to the general chaos mentioned above. Consequently, a leader must make sure at all times--particularly when seen publicly or making public announcements--that optimism is visible or embraced in the words used in both verbal and written communications. This is of course helped by rotating schedules so that excessive exhaustion is avoided, and is also aided by celebrating the incremental victories as these crises unfold. That is, making sure the successes are communicated as widely as the challenges. We have discussed celebrating incremental victories in the past as necessary to re-energize leadership to move to the top of the mountain, and this is never more important than when one is in the valley.
Seventh, resilience. After several days of in being in the midst of a crisis, the team will often find themselves “hitting a wall,” much like a runner experiences in the 21st mile of a marathon. Unfortunately, crises are often not over when the wall is in sight, and therefore leadership must find the resiliency they need to continue the journey with the strength and energy that is required. Resilience was seen continuously during our recent experience, as our system and regional leadership teams were fully present and enthusiastically participated in our regular conference calls.
As we have discussed in the past, leadership skills and competencies are essential if an organization is to reach excellence and sustain themselves at the top of the mountain. But in reality, these skills are even more important as one’s organization is experiencing a walk through the valley.
Wednesday, September 3, 2008
Wednesday, August 27, 2008
The Mountains and Valleys of Leadership
In a recent blog post, I discussed the implications of the mountain and valley that CHRISTUS Health experienced recently with regard to the separation of conjoined twins at CHRISTUS Santa Rosa Children’s Hospital and the heparin incident in our NICU at CHRISTUS Spohn South. In that post, I talked about the leadership requirements necessary to travel over mountains and into valleys.
The importance of this discussion was indeed re-emphasized to me on my visit to our Texarkana region recently. At our Touchstone awards in 2006, we presented a Leadership award to the Texarkana team because they had reached all their excellence goals for several years and had demonstrated that they knew how to sustain excellence in all four of our directions on our Journey to Excellence. (This was the first and only time we have presented this award to a team of regional leaders.) The Senior Leadership Team at CHRISTUS talked about them frequently, indicating that by improving clinical quality and service delivery while maintaining a strong emphasis on community value, they had proven that they could create business literacy throughout their region. We even said they had “cracked the code,” and we published several papers based on their performance.
However, as they moved through FY07, they had some major challenges, particularly with their business literacy, and therefore lost focus on their clinical and service measurements, causing their metrics to decrease. This obviously caused us to pause and ask the question, “Did they really deserve the Leadership award in 2006?” Did we think they had some of the right qualities for being an outstanding leadership team, but in fact were they missing some of the more important ingredients which we failed to notice?
These questions deserved and have received much reflection, because we as the Senior Leadership Team, the coaches and mentors of these regional leaders and many of the future leaders of CHRISTUS Health, must make sure that we are teaching the right leadership competencies to be successful not only today, but long into the future.
When I visited this region recently and specifically spoke about their successes in FY08, it was clear to us all that we had made the right decision in giving them the first and only Leadership award, because as a result of their outcome metrics in 2008, they are now once again the best region of the 13 in CHRISTUS with regard to our directions to excellence. They have demonstrated that an excellent team is able to reach the mountaintop, but can, if faced with a perfect storm, find themselves in a valley. When they find themselves in this valley, they can quickly reenergize themselves, develop and implement corrective action plans and move forward out of the valley to the mountaintop once again.
This team has demonstrated the resilience, the optimism, the strong integrated teamwork and the intense focus that is required to journey from the valley to the mountaintop once again. These are necessary in addition to the traditional competencies of financial knowledge, conflict management, strategic planning and others which are essential to be designated as an excellent team. These are the qualities that must be learned by all present and future leaders in health care both in the U.S. and internationally. These are the qualities that must be taught in our Masters of Health Care Administration programs and must be role modeled and be re-emphasized throughout CHRISTUS, including through our mentoring programs. These qualities need to be identified in the applicants for our management excellence and leadership academy trainees as we prepare the future leaders to succeed us in this future health system.
In summary, we were right. The Texarkana team had those qualities and deserved the Leadership award. And more importantly, they never lost those qualities when they found themselves in the valley.
The importance of this discussion was indeed re-emphasized to me on my visit to our Texarkana region recently. At our Touchstone awards in 2006, we presented a Leadership award to the Texarkana team because they had reached all their excellence goals for several years and had demonstrated that they knew how to sustain excellence in all four of our directions on our Journey to Excellence. (This was the first and only time we have presented this award to a team of regional leaders.) The Senior Leadership Team at CHRISTUS talked about them frequently, indicating that by improving clinical quality and service delivery while maintaining a strong emphasis on community value, they had proven that they could create business literacy throughout their region. We even said they had “cracked the code,” and we published several papers based on their performance.
However, as they moved through FY07, they had some major challenges, particularly with their business literacy, and therefore lost focus on their clinical and service measurements, causing their metrics to decrease. This obviously caused us to pause and ask the question, “Did they really deserve the Leadership award in 2006?” Did we think they had some of the right qualities for being an outstanding leadership team, but in fact were they missing some of the more important ingredients which we failed to notice?
These questions deserved and have received much reflection, because we as the Senior Leadership Team, the coaches and mentors of these regional leaders and many of the future leaders of CHRISTUS Health, must make sure that we are teaching the right leadership competencies to be successful not only today, but long into the future.
When I visited this region recently and specifically spoke about their successes in FY08, it was clear to us all that we had made the right decision in giving them the first and only Leadership award, because as a result of their outcome metrics in 2008, they are now once again the best region of the 13 in CHRISTUS with regard to our directions to excellence. They have demonstrated that an excellent team is able to reach the mountaintop, but can, if faced with a perfect storm, find themselves in a valley. When they find themselves in this valley, they can quickly reenergize themselves, develop and implement corrective action plans and move forward out of the valley to the mountaintop once again.
This team has demonstrated the resilience, the optimism, the strong integrated teamwork and the intense focus that is required to journey from the valley to the mountaintop once again. These are necessary in addition to the traditional competencies of financial knowledge, conflict management, strategic planning and others which are essential to be designated as an excellent team. These are the qualities that must be learned by all present and future leaders in health care both in the U.S. and internationally. These are the qualities that must be taught in our Masters of Health Care Administration programs and must be role modeled and be re-emphasized throughout CHRISTUS, including through our mentoring programs. These qualities need to be identified in the applicants for our management excellence and leadership academy trainees as we prepare the future leaders to succeed us in this future health system.
In summary, we were right. The Texarkana team had those qualities and deserved the Leadership award. And more importantly, they never lost those qualities when they found themselves in the valley.
Wednesday, August 20, 2008
The Value of Relationships
Having completed visits to six of the CHRISTUS Health regions as part of our plan to spend time in every region, site and business unit both in the U.S. and internationally as we move toward our 10th anniversary, I have been reflecting on the value of relationships in creating a culture of excellence in an organization.
In these last 10 years, before each trip to a facility or program the senior team has asked the question, “Are we doing the right thing by taking the time of the local leaders to facilitate our visits?”
We questioned whether they had more important things to do than planning an agenda for our visit, which obviously involves the time and efforts of members of their teams. And as much as we would hope they would not make special preparations, we always know that they will be made, and we will be fed well during our visits. Obviously, this is not only a time but an expense issue as well. So is it really worthwhile?
During these visits--as we have done in the past--we instruct the local teams to utilize our time as effectively as possible, making sure they know we are available as early as 6 a.m. and want to fill our day completely until 9 or 10 at night. We ask them to make sure that as we come to give our updates, they create forums for us to reach as many Associates, board members (both governance and foundation), physicians (including medical leadership) and volunteers as possible. For our visits over the last two months, they have done just that. In our most recent regional visit, I had the opportunity to interact with over 2,500 Associates, 12 governance board members, 20 foundation board members, 30 members of their medical staff and over 200 volunteers. I was amazed at the attendance at the various forums, the attentiveness during my presentations, the thoughtfulness of the questions posed during the dialogues and the constant comments by many of how beneficial these interactions were.
These comments included:
* “I can’t believe you spent the time to come and visit us.”
* “I cannot believe that you know our journey so well that you can speak to it without looking at notes.”
* “We are truly appreciative of having a better knowledge of what the entire CHRISTUS system is doing.”
* “It is great to understand how we as a department, business unit or clinical service fit into the regional strategies and how that strategy then fits into CHRISTUS Health system strategy.”
* “We are so proud of being part of the CHRISTUS family because we now know better what other family members are doing, particularly as you shared the stories of Santa Rosa and Spohn as being at the top of the mountain and in the valley in the last several weeks as well as the work occurring in the CHRISTUS Stehlin Foundation in Houston.”
* “We are pleased to see your passion and enthusiasm, which gives us the energy and the focus we need to continue the Journey to Excellence in our specific areas.”
In the past, if you asked many CEOs in health care what their major role in their organization was, they would tell you it was to be the external face of the health care system. That would mean that they thought most of their time should be spent in Washington, at the state government, attending national and state association meetings and addressing local groups such as Rotary and Lions clubs regarding the status of the health care system they were leading.
Although these external activities are still important today, with the challenges we are facing in health care, it is my belief that much more attention must be placed on creating the internal face of the leadership team for all the Associates, physicians and volunteers who are part of the CHRISTUS family. It is clear to me that the Journey to Excellence is only attained if the people believe and work in a culture of excellence. And it is more clear to me than ever after six of these regional meetings that the culture of excellence can only be created, energized and sustained if the CEO and the leadership team are there to speak to it and to demonstrate by behavior that it is a way of life in CHRISTUS Health and not a mission, vision and value statement framed on a wall or embedded in a series of policies in a book that is rarely read by anyone.
We all know at CHRISTUS that these trips take an enormous amount of time and effort on the part of the leadership team, the communications team who plans the agenda and the local leadership team who carries out the implementation. But at the end of each trip, the value of these efforts are reinforced and remind us that although we might believe that our greatest asset in health care and particularly in CHRISTUS Health may be the $4.7 billion we have on our balance sheet which represents the amount of buildings and technologies that we own and operate, in reality our greatest asset is our people. And people are motivated by people who have developed relationships with them and who demonstrate by the way they walk and talk that they are committed to excellence. This can only be transmitted by face-to-face forums through these regional visits, and must be seen as one of the most important things we do. So often we attempt to resolve crises in health care quickly and efficiently and fail because we have not established the appropriate culture or relationships prior to the occurrence of the crisis.
The challenges in health care are great and the changes we must make to address these challenges are even greater, but at the end of the day, if we expect to make the progress necessary to provide excellence for every person who comes through our doors, we must believe that relationships and the culture of excellence that comes from them is the essential ingredient to be sure that our people create an excellent environment in both clinical and quality services so that the care that is rendered is worthy of the CHRISTUS brand.
In these last 10 years, before each trip to a facility or program the senior team has asked the question, “Are we doing the right thing by taking the time of the local leaders to facilitate our visits?”
We questioned whether they had more important things to do than planning an agenda for our visit, which obviously involves the time and efforts of members of their teams. And as much as we would hope they would not make special preparations, we always know that they will be made, and we will be fed well during our visits. Obviously, this is not only a time but an expense issue as well. So is it really worthwhile?
During these visits--as we have done in the past--we instruct the local teams to utilize our time as effectively as possible, making sure they know we are available as early as 6 a.m. and want to fill our day completely until 9 or 10 at night. We ask them to make sure that as we come to give our updates, they create forums for us to reach as many Associates, board members (both governance and foundation), physicians (including medical leadership) and volunteers as possible. For our visits over the last two months, they have done just that. In our most recent regional visit, I had the opportunity to interact with over 2,500 Associates, 12 governance board members, 20 foundation board members, 30 members of their medical staff and over 200 volunteers. I was amazed at the attendance at the various forums, the attentiveness during my presentations, the thoughtfulness of the questions posed during the dialogues and the constant comments by many of how beneficial these interactions were.
These comments included:
* “I can’t believe you spent the time to come and visit us.”
* “I cannot believe that you know our journey so well that you can speak to it without looking at notes.”
* “We are truly appreciative of having a better knowledge of what the entire CHRISTUS system is doing.”
* “It is great to understand how we as a department, business unit or clinical service fit into the regional strategies and how that strategy then fits into CHRISTUS Health system strategy.”
* “We are so proud of being part of the CHRISTUS family because we now know better what other family members are doing, particularly as you shared the stories of Santa Rosa and Spohn as being at the top of the mountain and in the valley in the last several weeks as well as the work occurring in the CHRISTUS Stehlin Foundation in Houston.”
* “We are pleased to see your passion and enthusiasm, which gives us the energy and the focus we need to continue the Journey to Excellence in our specific areas.”
In the past, if you asked many CEOs in health care what their major role in their organization was, they would tell you it was to be the external face of the health care system. That would mean that they thought most of their time should be spent in Washington, at the state government, attending national and state association meetings and addressing local groups such as Rotary and Lions clubs regarding the status of the health care system they were leading.
Although these external activities are still important today, with the challenges we are facing in health care, it is my belief that much more attention must be placed on creating the internal face of the leadership team for all the Associates, physicians and volunteers who are part of the CHRISTUS family. It is clear to me that the Journey to Excellence is only attained if the people believe and work in a culture of excellence. And it is more clear to me than ever after six of these regional meetings that the culture of excellence can only be created, energized and sustained if the CEO and the leadership team are there to speak to it and to demonstrate by behavior that it is a way of life in CHRISTUS Health and not a mission, vision and value statement framed on a wall or embedded in a series of policies in a book that is rarely read by anyone.
We all know at CHRISTUS that these trips take an enormous amount of time and effort on the part of the leadership team, the communications team who plans the agenda and the local leadership team who carries out the implementation. But at the end of each trip, the value of these efforts are reinforced and remind us that although we might believe that our greatest asset in health care and particularly in CHRISTUS Health may be the $4.7 billion we have on our balance sheet which represents the amount of buildings and technologies that we own and operate, in reality our greatest asset is our people. And people are motivated by people who have developed relationships with them and who demonstrate by the way they walk and talk that they are committed to excellence. This can only be transmitted by face-to-face forums through these regional visits, and must be seen as one of the most important things we do. So often we attempt to resolve crises in health care quickly and efficiently and fail because we have not established the appropriate culture or relationships prior to the occurrence of the crisis.
The challenges in health care are great and the changes we must make to address these challenges are even greater, but at the end of the day, if we expect to make the progress necessary to provide excellence for every person who comes through our doors, we must believe that relationships and the culture of excellence that comes from them is the essential ingredient to be sure that our people create an excellent environment in both clinical and quality services so that the care that is rendered is worthy of the CHRISTUS brand.
Wednesday, August 13, 2008
Competition and Collaboration
I’m sure that many of you have read the recent article published by the American Hospital Association in which they predict that 1,200 of the 5,200 hospitals in America will most likely go bankrupt in 2009. One would expect our first response to that news to be elation, in that some of these hospitals may be in our markets and this would eliminate our competition and make our Journey to Excellence easier.
However, this first impression may not, in reality, be the ultimate effect of these closures. In CHRISTUS Health, we are living out this experience in real-time as hospitals in two of our regions in the U.S. have announced bankruptcy, and one of the two is being auctioned off in the next several weeks.
Obviously, during this period of time, the institutions are rapidly downsizing their census, and many of their patients are being seen in our facilities. But because both of these hospitals are in two of our most challenged regions where the number of uninsured or underinsured is extremely high, the shift of patients to our facilities is not paralleling a significant rise in collectible revenue, but is increasing our expenses significantly. Consequently, these closures are ultimately having a negative effect on our bottom line. It seems that this scenario will be the most likely one playing out in all of the markets where these bankruptcies may occur, given that bankruptcies are most likely to take place in challenging markets that have a higher-than-average number of uninsured and therefore a large bad debt.
If, then, our response is not elation and we expect negative results, what should our response be? First and foremost, in good times and bad, we should always work to develop open communication with our competitor to make sure we are meeting the needs of the community in the best possible way. In fact, if collaborative planning was always a high priority for health care delivery systems, perhaps the appropriate services could be separated into each of the facilities in a community, preventing unnecessary duplication and causing each hospital to be much more profitable or at least to absorb fewer losses. Unfortunately, most economists and governmental officials in the U.S. seem to believe that a competitive model that works in other industries will successfully work in health care, which is truly a service industry open 24 hours a day, 365 days a year, where all those who seek treatment must be served (at least for emergencies).
Unfortunately, because of the highly regulated nature of health care, the fact that the majority of our payments are provided by the cumbersome governmental entities of Medicare and Medicaid and the polarity between physicians/providers and hospitals/health systems, theories from Economics 101 have never and will never work. In fact, the competitive nature that has resulted between different providers in the same community all over the country has caused an extreme duplication of services and technology, which ultimately do not create profitable product lines and may even result in the overuse of treatments and procedures.
Although we offered to collaborate with the hospitals in the two regions I mentioned above, our offers to have those conversations were never accepted, and the resulting outcomes are evident. Therefore, we are now faced with the closure of these hospitals, and must determine the best way to quickly absorb an increased number of patients and hopefully develop efficiencies and effective processes to do this in a way that will minimize our losses and eventually produce business stability along with these increasing volumes.
But because this cannot be done in a proactive way over a defined period of time, but rather has to be done in reaction to a crisis, bankruptcy or foreclosure, often the initial solutions create short-term challenges which require significant effort to turn into positive values in the long-term.
The reality is that what might seem like a joyous occasion initially actually becomes a significant issue and often a burden when the realities of the situation are fully understood. So as we stand here in this moment in time, it would be best to reflect upon the best ways to prevent these foreclosures and bankruptcies from occurring, rather than being forced to stand idly by while the additional nearly 1,200 closings occur.
However, this first impression may not, in reality, be the ultimate effect of these closures. In CHRISTUS Health, we are living out this experience in real-time as hospitals in two of our regions in the U.S. have announced bankruptcy, and one of the two is being auctioned off in the next several weeks.
Obviously, during this period of time, the institutions are rapidly downsizing their census, and many of their patients are being seen in our facilities. But because both of these hospitals are in two of our most challenged regions where the number of uninsured or underinsured is extremely high, the shift of patients to our facilities is not paralleling a significant rise in collectible revenue, but is increasing our expenses significantly. Consequently, these closures are ultimately having a negative effect on our bottom line. It seems that this scenario will be the most likely one playing out in all of the markets where these bankruptcies may occur, given that bankruptcies are most likely to take place in challenging markets that have a higher-than-average number of uninsured and therefore a large bad debt.
If, then, our response is not elation and we expect negative results, what should our response be? First and foremost, in good times and bad, we should always work to develop open communication with our competitor to make sure we are meeting the needs of the community in the best possible way. In fact, if collaborative planning was always a high priority for health care delivery systems, perhaps the appropriate services could be separated into each of the facilities in a community, preventing unnecessary duplication and causing each hospital to be much more profitable or at least to absorb fewer losses. Unfortunately, most economists and governmental officials in the U.S. seem to believe that a competitive model that works in other industries will successfully work in health care, which is truly a service industry open 24 hours a day, 365 days a year, where all those who seek treatment must be served (at least for emergencies).
Unfortunately, because of the highly regulated nature of health care, the fact that the majority of our payments are provided by the cumbersome governmental entities of Medicare and Medicaid and the polarity between physicians/providers and hospitals/health systems, theories from Economics 101 have never and will never work. In fact, the competitive nature that has resulted between different providers in the same community all over the country has caused an extreme duplication of services and technology, which ultimately do not create profitable product lines and may even result in the overuse of treatments and procedures.
Although we offered to collaborate with the hospitals in the two regions I mentioned above, our offers to have those conversations were never accepted, and the resulting outcomes are evident. Therefore, we are now faced with the closure of these hospitals, and must determine the best way to quickly absorb an increased number of patients and hopefully develop efficiencies and effective processes to do this in a way that will minimize our losses and eventually produce business stability along with these increasing volumes.
But because this cannot be done in a proactive way over a defined period of time, but rather has to be done in reaction to a crisis, bankruptcy or foreclosure, often the initial solutions create short-term challenges which require significant effort to turn into positive values in the long-term.
The reality is that what might seem like a joyous occasion initially actually becomes a significant issue and often a burden when the realities of the situation are fully understood. So as we stand here in this moment in time, it would be best to reflect upon the best ways to prevent these foreclosures and bankruptcies from occurring, rather than being forced to stand idly by while the additional nearly 1,200 closings occur.
Wednesday, August 6, 2008
Could segmented health care be part of the solution?
It is obvious that the major agenda topics for the new president will increasingly come into focus prior to the elections in November, and we hope that the redesign of health care will be high on this agenda. We all know that the health care system in the U.S. is broken, based on all four aspects of our Journey to Excellence: the overall quality is mediocre, the service delivery recently reported through HCAHPS is lacking, the business literacy is in jeopardy as the AHA predicts 1,200 hospitals will go bankrupt this year and the community value as represented by the level of charity care provided by non-profit hospitals and health systems is under scrutiny by the IRS and congress as we speak.
We all know that the redesign of American health care will most likely be evolutionary rather than revolutionary. However, it is imperative that all of us who are working in this industry spend significant time looking at the pieces of the puzzle that could be put together to create a new delivery process which would easily be able to significantly improve the low scores in the four directions outlined above. As I am in the midst of my travels to CHRISTUS regions, I have spent time in planes and sitting in airports reflecting on some of these pieces more thoroughly, and today I’d like to share what I think may be the most important one.
I am proposing that we need to get increasingly comfortable with segmented health care as one of the primary solutions to our dilemma. Our experience in Mexico with segmented health care gives me even more reassurance that this would be most helpful, but it is only added to the knowledge and experience I‘ve gained by reflecting on my medical school, internship and residency training experiences where I practiced in segmented delivery systems.
First, what do I mean by segmented?
For me, segmented health care means that you provide the health care in different settings and with different amenities according to the patient’s or family’s ability to pay for such services.
I know that many people initially react to this idea by asking, “Dr. Royer, are you proposing different levels of health care for the poor and the rich?” Obviously, based on what you have read in my blog before and knowing that I am the team leader for a Catholic, faith-based health care system that is founded on incarnational spirituality, that is not the case. We have proven in Mexico that you can provide equal clinical quality of care and service delivery while providing different locations and amenities for various populations based on their economic status. So in reality, my proposal is to provide equitable health care for all from the clinical and service perspectives, but not providing equal amenities to all.
It is clear to me now as I have reflected on my early years in health care and have reinforced these experiences with my observations in Mexico in the last seven years of our Journey to Excellence that our failure in the U.S. to control our costs and to reduce our bad debt is primarily from the fact that we are providing amenities/private rooms, flat screen TVs, free telephone access, free internet connections, menu selections and private bathrooms to people who cannot afford them. These amenities obviously have to be built into our overhead costs for providing health care, and therefore have increased our expenses. As a result, we are increasing our revenues to potentially address these expenses, but because people cannot pay, the prices that are driving our revenues are increasing as well as our bad debt.
This is in reality also what has happened to Starbucks, which I mentioned in my post last week. I indicated that they significantly increased their prices for a 20-cent cup of coffee in order to have the monies to rapidly expand their shops throughout the world. But they, like health care, have reached a point where the differentiation between the price and the cost are so distant that the value added is no longer present.
I am sure that many people reading this blog would say “Can we safely go back to ward medicine or four-bed suites with the infectious disease issues facing us today and with the expectation by most Americans that they need the private room and the amenities described above?”
To me, the answers are clear. We will need to continue to undertake a re-educational process for American citizens to inform them that we are committed to equal quality and service, but just as in any other industries, you cannot buy amenities associated with your purchase if you cannot pay for them. By creating a segmented system, we will thereby be able to decrease the cost for health care and better care for the large number of uninsured who are getting no care in the U.S. We will need to remind them that clinical and service quality are what they need and want, and that for the short period of time they’re in our outpatient, inpatient, senior campus programs or hospice and palliative care programs, the amenities add no value to their care and certainly can be minimized and not missed during those episodes.
A key example of this would be when we go into a car dealer to buy a car. Adequate transportation is the expected outcome. But indeed, some of us can only afford a used car, and some can afford a luxury automobile. But transferring this analogy to health care, I believe we are giving sunroofs, high-class stereo systems and GPS systems to everyone, even those who can only afford the cheapest of models. Therefore, we are creating a cost structure that has proven to not be sustainable, and if we continue it, we’ll fail in the future.
Again, we must remind people over and over that we are not sacrificing quality or service, but in fact the package in which that care is delivered will need to be wrapped differently for different people based on their ability to pay or not pay.
Second, with regard to patients who need special care either because of the intensity of their illness or infectious issues, we had the answers years ago, and we still have them today. If the severity of their illness is significant, they can be moved to our cardiac care units of ICUs, whose physical layouts I would suggest need not be changed, since the value of the amenities there are mainly focused in the high technology required or the visibility required by the nurses and physicians who are caring for them. With regard to infections, we always had this issue in ward medicine in the 1960s and ‘70s, and that’s why we created infectious private rooms close to the wards where these patients could be placed when they needed to be isolated. Because these rooms were different, my belief that we may have paid even more attention to the infectious disease and isolation precautions than we do today.
Because everyone is now in a private room which can be changed to an isolation room by merely putting a sign outside the door, I wonder if we are not as diligent to our infectious disease precautions because, in fact, that room does not look that much different from any other room that we might have. Segmented medicine requires that different types of care will be rendered in different settings, and this may in fact positively affect the level of care delivered.
In closing, I readily admit that this proposal as one piece of the puzzle for health care redesign may seem radical and may be interpreted by many as a step backward rather than a step forward. But based on significant reflection on my training and the segmented system in Mexico where those who can pay are treated in one series of our hospitals and clinics and those who cannot pay are treated in another network of short-stay hospitals and clinics, I am convinced that a segmented health care system is at least worth putting on the table for reconsideration by the task force for health care redesign.
We all know that the redesign of American health care will most likely be evolutionary rather than revolutionary. However, it is imperative that all of us who are working in this industry spend significant time looking at the pieces of the puzzle that could be put together to create a new delivery process which would easily be able to significantly improve the low scores in the four directions outlined above. As I am in the midst of my travels to CHRISTUS regions, I have spent time in planes and sitting in airports reflecting on some of these pieces more thoroughly, and today I’d like to share what I think may be the most important one.
I am proposing that we need to get increasingly comfortable with segmented health care as one of the primary solutions to our dilemma. Our experience in Mexico with segmented health care gives me even more reassurance that this would be most helpful, but it is only added to the knowledge and experience I‘ve gained by reflecting on my medical school, internship and residency training experiences where I practiced in segmented delivery systems.
First, what do I mean by segmented?
For me, segmented health care means that you provide the health care in different settings and with different amenities according to the patient’s or family’s ability to pay for such services.
I know that many people initially react to this idea by asking, “Dr. Royer, are you proposing different levels of health care for the poor and the rich?” Obviously, based on what you have read in my blog before and knowing that I am the team leader for a Catholic, faith-based health care system that is founded on incarnational spirituality, that is not the case. We have proven in Mexico that you can provide equal clinical quality of care and service delivery while providing different locations and amenities for various populations based on their economic status. So in reality, my proposal is to provide equitable health care for all from the clinical and service perspectives, but not providing equal amenities to all.
It is clear to me now as I have reflected on my early years in health care and have reinforced these experiences with my observations in Mexico in the last seven years of our Journey to Excellence that our failure in the U.S. to control our costs and to reduce our bad debt is primarily from the fact that we are providing amenities/private rooms, flat screen TVs, free telephone access, free internet connections, menu selections and private bathrooms to people who cannot afford them. These amenities obviously have to be built into our overhead costs for providing health care, and therefore have increased our expenses. As a result, we are increasing our revenues to potentially address these expenses, but because people cannot pay, the prices that are driving our revenues are increasing as well as our bad debt.
This is in reality also what has happened to Starbucks, which I mentioned in my post last week. I indicated that they significantly increased their prices for a 20-cent cup of coffee in order to have the monies to rapidly expand their shops throughout the world. But they, like health care, have reached a point where the differentiation between the price and the cost are so distant that the value added is no longer present.
I am sure that many people reading this blog would say “Can we safely go back to ward medicine or four-bed suites with the infectious disease issues facing us today and with the expectation by most Americans that they need the private room and the amenities described above?”
To me, the answers are clear. We will need to continue to undertake a re-educational process for American citizens to inform them that we are committed to equal quality and service, but just as in any other industries, you cannot buy amenities associated with your purchase if you cannot pay for them. By creating a segmented system, we will thereby be able to decrease the cost for health care and better care for the large number of uninsured who are getting no care in the U.S. We will need to remind them that clinical and service quality are what they need and want, and that for the short period of time they’re in our outpatient, inpatient, senior campus programs or hospice and palliative care programs, the amenities add no value to their care and certainly can be minimized and not missed during those episodes.
A key example of this would be when we go into a car dealer to buy a car. Adequate transportation is the expected outcome. But indeed, some of us can only afford a used car, and some can afford a luxury automobile. But transferring this analogy to health care, I believe we are giving sunroofs, high-class stereo systems and GPS systems to everyone, even those who can only afford the cheapest of models. Therefore, we are creating a cost structure that has proven to not be sustainable, and if we continue it, we’ll fail in the future.
Again, we must remind people over and over that we are not sacrificing quality or service, but in fact the package in which that care is delivered will need to be wrapped differently for different people based on their ability to pay or not pay.
Second, with regard to patients who need special care either because of the intensity of their illness or infectious issues, we had the answers years ago, and we still have them today. If the severity of their illness is significant, they can be moved to our cardiac care units of ICUs, whose physical layouts I would suggest need not be changed, since the value of the amenities there are mainly focused in the high technology required or the visibility required by the nurses and physicians who are caring for them. With regard to infections, we always had this issue in ward medicine in the 1960s and ‘70s, and that’s why we created infectious private rooms close to the wards where these patients could be placed when they needed to be isolated. Because these rooms were different, my belief that we may have paid even more attention to the infectious disease and isolation precautions than we do today.
Because everyone is now in a private room which can be changed to an isolation room by merely putting a sign outside the door, I wonder if we are not as diligent to our infectious disease precautions because, in fact, that room does not look that much different from any other room that we might have. Segmented medicine requires that different types of care will be rendered in different settings, and this may in fact positively affect the level of care delivered.
In closing, I readily admit that this proposal as one piece of the puzzle for health care redesign may seem radical and may be interpreted by many as a step backward rather than a step forward. But based on significant reflection on my training and the segmented system in Mexico where those who can pay are treated in one series of our hospitals and clinics and those who cannot pay are treated in another network of short-stay hospitals and clinics, I am convinced that a segmented health care system is at least worth putting on the table for reconsideration by the task force for health care redesign.
Tuesday, July 29, 2008
Learning from Starbucks and Ford
I have recently been reflecting on discussions we have had at our annual leadership retreats over our 10-year-history regarding the characteristics of successful companies and great leaders. At our first leadership conference in June of 1999, I indicated that I believed Ford Motor Company and Starbucks were beginning downward spirals which, if not reversed, would cause them major difficulties in the future. Today, it appears this prediction was correct. Therefore, I think it might be beneficial for us to review why we predicted for the last nine years that these “Journeys to Mediocrity” would occur, and the continuous learnings and implications for CHRISTUS Health.
Based on my experience at the Henry Ford Health System and my early visits to the Henry Ford company, I saw and then reported that I had concerns about several things:
1. They were touting quality as “job number one," and yet were recalling about 400 cars a week for poor quality at that time (1993). The number of recalls have steadily increased since then. I have always been concerned that they were not being honest with themselves nor looking at the data which--even in the 1990s--was showing that Toyota and Honda were gaining market share in the U.S.
2. They were blaming all their expense increases on their health care expenses, and I reminded them that they should also be looking at what I deemed excessive benefits for their employees and retirees (i.e. 230 days of rehab services a year for alcoholics). I also reminded them that in 1996 they had an equal number of retirees and active employees with a significantly under-funded retirement program.
With regard to Starbucks, in 1994 I began to see a significant and rapid elevation of their charges (i.e. almost $3 for a cup of coffee which they reported only cost them 20 cents). I assumed that someone would finally be able to produce an even better cup of coffee and make the pricing much more reasonable. (We do that now in our Healthy Living coffee shops.) Their drive to increase their profits was based on their desire to open more and more stores in the U.S. and the world at large. My concerns were:
1. Their "family" was growing too quickly and they were not taking time to create the Starbucks culture in each of their new locations.
2. They were implementing the same price increases that we saw were slowly destroying health care. For example, a Complete Blood Count (CBC) now costs us 6 cents to perform, and we still charge between $12-$24 (and some heath systems charge much more). As these processes have become more automated, the cost to us has decreased, but our price has not. The rule that your pricing structure must in someway parallel your cost structure or eventually you will reach an impasse is being violated in this case.
3. Also, I saw Starbucks continuing to not only grow the family excessively but diversifying the family too quickly by getting in the food business and the music business and therefore losing focus on the Journey to Excellence in the coffee business.
So what are the implications and learnings for us from Ford Motor and Starbucks?
1. We must never decrease the intensity of our focus and work on our Journey to Excellence.
2. We must continue to be transparent with all of our metrics, both internally and externally. This means we must never think we are better than we are, and will give us an opportunity to continue to share best practices from the best performers and continue to develop actions plans to reach our outstanding goals.
3. Our work to diversify our portfolio to include 1/3 acute care, 1/3 non-acute care and 1/3 international care must continue with health care and wellness programs, making sure we have the diverse leadership and expertise to lead these ministries which all connect.
4. We must continue to seek further understanding of our cost structures and increase to parallel our pricing structures to them. We must remember that you can not continue to fund growth with prices that a majority of people will be unable or unwilling to pay.
As move toward our 10th Anniversary on Feb. 1, 2009, we must maintain our commitment to being a “learning organization,” making sure we continue to transition CHRISTUS Health to being one of the best and future-looking health care systems in the world. Pausing to reflect on our conversations about the Ford Motor Company and Starbucks over our 10-year-history and reflecting on where they are today and the resultant learnings is an important part of our continuing Journey to Excellence!
Based on my experience at the Henry Ford Health System and my early visits to the Henry Ford company, I saw and then reported that I had concerns about several things:
1. They were touting quality as “job number one," and yet were recalling about 400 cars a week for poor quality at that time (1993). The number of recalls have steadily increased since then. I have always been concerned that they were not being honest with themselves nor looking at the data which--even in the 1990s--was showing that Toyota and Honda were gaining market share in the U.S.
2. They were blaming all their expense increases on their health care expenses, and I reminded them that they should also be looking at what I deemed excessive benefits for their employees and retirees (i.e. 230 days of rehab services a year for alcoholics). I also reminded them that in 1996 they had an equal number of retirees and active employees with a significantly under-funded retirement program.
With regard to Starbucks, in 1994 I began to see a significant and rapid elevation of their charges (i.e. almost $3 for a cup of coffee which they reported only cost them 20 cents). I assumed that someone would finally be able to produce an even better cup of coffee and make the pricing much more reasonable. (We do that now in our Healthy Living coffee shops.) Their drive to increase their profits was based on their desire to open more and more stores in the U.S. and the world at large. My concerns were:
1. Their "family" was growing too quickly and they were not taking time to create the Starbucks culture in each of their new locations.
2. They were implementing the same price increases that we saw were slowly destroying health care. For example, a Complete Blood Count (CBC) now costs us 6 cents to perform, and we still charge between $12-$24 (and some heath systems charge much more). As these processes have become more automated, the cost to us has decreased, but our price has not. The rule that your pricing structure must in someway parallel your cost structure or eventually you will reach an impasse is being violated in this case.
3. Also, I saw Starbucks continuing to not only grow the family excessively but diversifying the family too quickly by getting in the food business and the music business and therefore losing focus on the Journey to Excellence in the coffee business.
So what are the implications and learnings for us from Ford Motor and Starbucks?
1. We must never decrease the intensity of our focus and work on our Journey to Excellence.
2. We must continue to be transparent with all of our metrics, both internally and externally. This means we must never think we are better than we are, and will give us an opportunity to continue to share best practices from the best performers and continue to develop actions plans to reach our outstanding goals.
3. Our work to diversify our portfolio to include 1/3 acute care, 1/3 non-acute care and 1/3 international care must continue with health care and wellness programs, making sure we have the diverse leadership and expertise to lead these ministries which all connect.
4. We must continue to seek further understanding of our cost structures and increase to parallel our pricing structures to them. We must remember that you can not continue to fund growth with prices that a majority of people will be unable or unwilling to pay.
As move toward our 10th Anniversary on Feb. 1, 2009, we must maintain our commitment to being a “learning organization,” making sure we continue to transition CHRISTUS Health to being one of the best and future-looking health care systems in the world. Pausing to reflect on our conversations about the Ford Motor Company and Starbucks over our 10-year-history and reflecting on where they are today and the resultant learnings is an important part of our continuing Journey to Excellence!
Tuesday, July 22, 2008
The Past Eight Weeks of CHRISTUS' Journey
As I have mentioned before, I have been out on the road since June with members of the CHRISTUS Senior Leadership Team on our regular visits to each CHRISTUS region. This year on our visits, we are gearing up for our 10th anniversary, which will occur in February of 2009 and delivering the message that CHRISTUS’ first 10 years have been marked by challenges, changes and progress.
After I have completed these visits to each of our regions, I will do a complete blog post on what we learned and what we need to do to get ready for our 10th birthday, which will coincide with our fourth governance conference in February.
In making these trips, it has become clear to me that in the last eight weeks of CHRISTUS’ journey, we’ve experienced the extremes of health care and therefore the extremes that test the mettle of health care leaders.
We have experienced the height of the mountain top with the separation of conjoined twins at CHRISTUS Santa Rosa Children’s Hospital, which received national and international recognition. We have also traveled through the lowest part of the health care valley when over a dozen infants received a higher-than-recommended dose of heparin used to flush their IV lines in the NICU at CHRISTUS Spohn Hospital Corpus Christi - South.
What does this period of time tell us regarding health care leadership? First, it demonstrates that leadership demands resilience, and second, it requires optimism.
Third, it requires realism, recognizing that there will always be mountains and valleys, not only in life in general, but especially in health care since we operate in a highly technical and complex environment as we take care of patients’ lives. Fourth, it requires the ability to rapidly identify challenges and make change as quickly as possible to address these challenges. If progress is going to continue, we must be able to meet the demands placed on us by a host of stakeholders and plan to address challenges within this framework as we look toward the future.
Fifth, transparency is essential. Transparency was required in both cases—to the parents of the separated conjoined twins regarding the potential side effects and even survival rate of this rarely performed surgery, and to the families of children in the NICU as soon as the error was discovered.
Obviously, this time period in CHRISTUS’ history has proven that these five leadership qualities are essential in addition to the traditional core competencies I described in an earlier blog post.
I have concluded each presentation thus far in the regions by sharing the stories about the mountain top and valley that occurred on our journey recently. I indicate that the people in the room probably know very little or nothing about their other CHRISTUS family members who work at CHRISTUS Spohn South or CHRISTUS Santa Rosa Children’s Hospital. However, I also point out that they are all strongly connected because part of our system brand is our commitment to the Journey to Excellence, and that is what CHRISTUS Spohn, CHRISTUS Santa Rosa and their regions share in common.
Therefore, we can expect that both at the top of the mountain and in the valley, the CHRISTUS team was doing their very best to make sure that the issues were identified quickly, the proper procedures were undertaken and the patients and families being cared for were receiving the highest quality of care possible. Many companies with strong brands have experienced--and will experience--mountains and valleys, but it is the strength of the brand and the leadership qualities of people developing and sustaining that brand that gives them the ability to continue on the Journey whether they are at the top or the bottom.
After I have completed these visits to each of our regions, I will do a complete blog post on what we learned and what we need to do to get ready for our 10th birthday, which will coincide with our fourth governance conference in February.
In making these trips, it has become clear to me that in the last eight weeks of CHRISTUS’ journey, we’ve experienced the extremes of health care and therefore the extremes that test the mettle of health care leaders.
We have experienced the height of the mountain top with the separation of conjoined twins at CHRISTUS Santa Rosa Children’s Hospital, which received national and international recognition. We have also traveled through the lowest part of the health care valley when over a dozen infants received a higher-than-recommended dose of heparin used to flush their IV lines in the NICU at CHRISTUS Spohn Hospital Corpus Christi - South.
What does this period of time tell us regarding health care leadership? First, it demonstrates that leadership demands resilience, and second, it requires optimism.
Third, it requires realism, recognizing that there will always be mountains and valleys, not only in life in general, but especially in health care since we operate in a highly technical and complex environment as we take care of patients’ lives. Fourth, it requires the ability to rapidly identify challenges and make change as quickly as possible to address these challenges. If progress is going to continue, we must be able to meet the demands placed on us by a host of stakeholders and plan to address challenges within this framework as we look toward the future.
Fifth, transparency is essential. Transparency was required in both cases—to the parents of the separated conjoined twins regarding the potential side effects and even survival rate of this rarely performed surgery, and to the families of children in the NICU as soon as the error was discovered.
Obviously, this time period in CHRISTUS’ history has proven that these five leadership qualities are essential in addition to the traditional core competencies I described in an earlier blog post.
I have concluded each presentation thus far in the regions by sharing the stories about the mountain top and valley that occurred on our journey recently. I indicate that the people in the room probably know very little or nothing about their other CHRISTUS family members who work at CHRISTUS Spohn South or CHRISTUS Santa Rosa Children’s Hospital. However, I also point out that they are all strongly connected because part of our system brand is our commitment to the Journey to Excellence, and that is what CHRISTUS Spohn, CHRISTUS Santa Rosa and their regions share in common.
Therefore, we can expect that both at the top of the mountain and in the valley, the CHRISTUS team was doing their very best to make sure that the issues were identified quickly, the proper procedures were undertaken and the patients and families being cared for were receiving the highest quality of care possible. Many companies with strong brands have experienced--and will experience--mountains and valleys, but it is the strength of the brand and the leadership qualities of people developing and sustaining that brand that gives them the ability to continue on the Journey whether they are at the top or the bottom.
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