by Mike Wagner | 9:00 AM October 28, 2013
Spurred by government reforms and market expectations, healthcare leaders are being forced to reinvent their organizations. The model for healthcare is being flipped upside down — from decades of focusing on acute care episodes and encouraging utilization to a future where successful organizations are able to reduce utilization, manage population health, and activate patients in the consumption (and delivery) of their own care.
But, most organizations are likely to fail in this pursuit. History shows that 65% of transformation efforts yield no improvement while 20% of efforts result in worsened outcomes. Even when there is improvement, performance usually returns to previous levels within a few years.
This failure is not for lack of effort — health systems are making massive investments in new infrastructure, technology, processes and managerial approaches designed to manage change, such as electronic health records, Six Sigma and Lean Management. But, all of these efforts are dependent on people for both initial implementation and long term execution. The only organizations that will prosper in this environment of disruptive and massive change are those that build a resilient and adaptive culture in which staff members:
- Welcome and seek change, rather than resist it;
- Experiment and innovate, rather than maintain the status quo; and
- Make hard decisions without relying on approval from senior leaders.
There is no simple or single approach to building such a culture. But in our experience helping hundreds of hospitals and health systems manage this transformation, we have found three disciplines that are essential to the effort: Importing new knowledge, strategically deploying existing skills, and disseminating leadership across the ranks. This and posts to follow will explore each of these disciplines.
Importing New Knowledge
While businesses in other sectors have become adept at bringing in ideas from outside their walls, health care has lagged behind. A key reason is that healthcare leaders are often blind when it comes to creatively responding to the industry’s challenges. The source of this blindness is twofold.
- Humans are not wired to seek contradictory perspectives. Instead, we seek to reinforce what we already believe to be true. No surprise, therefore, that 80.6% of healthcare leaders believe the quality of care at their hospital is better than at the “typical” hospital. And only 1.2% believe their hospitals are below average in performance. As a result, most leaders in health care are slow to react to their changing environment because they are convinced that they already outperform their peers.
- The second blinder is more common in health care than in other sectors — leaders often actively isolate themselves from the outside world, believing that their industry’s challenges are entirely unique. These leaders resist the idea of learning from exemplars outside of health care. As a result, they are often ignorant of the managerial advances being made in other industries.
To respond to disruptive change, health care leaders need to first acknowledge their blindness and then actively overcome it by learning how other industries are addressing similar challenges. This requires developing creative approaches to finding new ideas from outside of healthcare. While this concept has been around for some time (pioneers like Virginia Mason started importing lean six-sigma practices into health care at least a decade ago) it is still not widely accepted and is rarely done as a matter of routine.
One hospital that has done this well is Memorial Hospital of South Bend, Indiana. They introduced the concept of the “Innovisit” — a routine and structured outreach that sends staff members to visit businesses in other industries. Support from the top is critical to the success of such initiatives, as it has been at Memorial where president and CEO Phil Newbold has championed the program.
At Memorial, each Innovisit involves a cross-functional team of “Innovisitors” who have been specially recruited and prepared for these events. Visits are carefully planned with the host organization and key questions are crafted in advance. Upon their return, innovisitors share their observations during special conferences and educational sessions offered at Memorial’s own “Innovation Café” — a dedicated space that was remodeled to support creative thinking and sharing. The “Innovation Café” itself is the result of an innovisit to a Whirlpool Corporation facility that included an Innovation Training Center.
The development of Memorial’s Heart and Vascular building is another example of ideas inspired by innovisits. While on one such visit, the innovistor team learned of a design consultancy whose architectural approach seemed like a much better fit with Memorial’s needs than the approach in development. The fact that the planning process was well underway did not deter Memorial from tapping the design consultancy to experiment with new design principles that resulted in a more patient-friendly center, replete with a meditation garden. Memorial further supports the organization’s innovation effort through its “Wizard School” that trains the entire staff — from parking lot attendants to C-suite executives — to think creatively.
Kaiser Permanente has sponsored similar excursions. For example, during a tour of a flight school, Kaiser staff took note of the “sterile cockpit” concept — specific times during a flight when no conversations are allowed between pilots unless they are necessary for safely flying the plane. This concept was adapted to create safer medication administration protocols that reduced interruptions and errors.
At Kaiser, spreading new ideas is a massive undertaking due to the size of the organization — more than 175,000 employees. To meet this challenge, Kaiser’s Innovation Consultancy — an internal consulting group — will routinely run pilot projects in order to test and prove a concept. The Consultancy will then use the results of those pilot projects to encourage other departments to adopt new ideas and improvements as well: its input in developing the Nurse Knowledge Exchange is an example of that. Working with nurses and patients, and tapping new tracking software for data input, the Consultancy team helped develop a quick, reliable and efficient process for transferring patient information between nurses at a patient’s bedside during shift changes. The impact of the Nurse Knowledge Exchange in boosting the quality of the information exchange and enhancing patient care soon led to its deployment at all Kaiser hospitals. In effect, the Consultancy accelerates the adoption of new ideas by doing much of the legwork required to implement new practices across multiple locations: Line managers are not burdened with the effort and work required to share and spread ideas with others. (Here’s more on the Consultancy’s approach.)
A leadership team that has been constantly bombarded with mind-stretching ideas from other organizations and disparate industries will possess a treasure trove of proven and practical ideas ready to be adapted and implemented. Many of the challenges that healthcare leaders will soon face — collapsing prices (consider Blu-Ray players now selling for $49); disruptive technologies (digital photography supplanting film); fierce competition (iPhones stealing the market made by Blackberry); and entirely new business models (Netflix doing what Blockbuster could not) — have already been seen in other industries, and have given rise to adaptive new strategies. Health care leaders would be unwise to repeat the mistakes of others; they would be foolish to overlook strategies and solutions that have already been developed and proven effective elsewhere.