Managing a health care facility

Health Care Facility

Managing a Health Care Facility

To some degree, leadership's thinking in health care has been in torpor. Rather than rigorously rethinking, health care management has been asleep at the wheel. In the midst of a battlefield, too many leaders have been settling for survival over winning. One sees it in some hospital mergers. The weak join the weak but succeed only in becoming a big, weak organization, not a strong one. They retain a vain hope that slight adjustments, rather than carving out a new vision, will transform them. Mergers and acquisitions are successful less than half of the time in terms of improving organizational performance (Sachdeva 189). It is clearly time to rethink the health care organizations' mission, culture, procedures, goals, measures; everything. What is needed now are bold new initiatives for daring new heights of achievement. Shaking people up with the excitement of stretch goal challenges and making them realize that what is most to be feared is not changing, is a far better approach than hunkering down in a foxhole (Reitemeier 70).

Exorbitant Costs

Any kid running a lemonade stand knows there is a price limit on what Customers will pay for lemonade. Cost reimbursement policies of years past tremendously damaged the hospital industry by creating a mindset that costs needn't be aggressively managed. Rather than being toughened over the years by having to deal with resource limits, the industry was crippled by payers (Ridenour 101). The result is a lack of experience in dealing with the real world of competition. Health care did not learn how to deal with harsh economic reality as other industries have, and it must rapidly catch up in mastering those skills.

The debate on reimbursement levels is now over. By 1998, 80% of employers who offered medical benefits had switched to managed care plans of one sort or another. Washington D.C. And state capitals report that their money trees have died. One could argue that that's not fair to providers, for what is the life of a loved one worth? When health professionals benefit our families, none of us question the worth of what is been done, we simply can't afford it. What was created in the past was an industry offering a product that literally had priced itself out of the market. And prices couldn't be reduced because costs were out of control (Yedidia 639). As we enter the next century, price increases have slowed due to a low inflation economy, a fortunate outcome but not one resulting from the right management prescriptions (Pew Higher Education Roundtable, 6). High costs and low quality are the yin and yang of mismanagement. The best assumption for managements to make is that hospitals will have continuously declining resources into the future, and quality will have to be simultaneously improved. Although it may sound paradoxical, the path to decreasing cost is first to increase quality.

Instead of covering costs by breaking the law or eliminating staff, management must cut waste in the system: Look for ideas from the staff, not victims to lay off. No organization ever cost-cut their way to excellence.

The Enemies Within

Failing organizations often fail their people or are failed by them. A sour working climate is a response to management inattentiveness. Among the staff this often is expressed by hostile workers or labor conflict, or by the presence of a substantial number of problem employees. The failed strategy of layoffs, and then more layoffs, creates an insecure, demoralized, and increasingly resistant workforce. There is also the problem of the unqualified. Foreign-trained staff are often both competent and caring; some are not. Skilled people are hard to find and hospitals often hire "warm bodies" because they think "you have to take what you can get" (Reitemeier 74). Temporary and part-time workers are often not oriented, have lapsed licenses, or no one checks out their skills. In one very grinding expose, the Austin American-Statesman News asserted that military doctors represented a lesser standard. In a long series of articles they alleged that the military system lacked safeguards, that certain physicians were named repeatedly in malpractice suits, that military malpractice cases go unreported to the National Practitioner Data Bank (over 900 incidents were reported in the two-year period 1994 -- 1995), and that the military was letting staff members without medical degrees practice medicine as a way to handle doctor shortages (Green et. al 158). The private sector is not immune to such charges either, and the question of how to police all professions in health care is proper and critical. The ranks of management are not immune as the toxic poisons of discontent feed into managerial hypocrisy; leaders who "talk the talk, but don't walk the walk" (Short 14). Managerial flame-out occurs when careers are stultified and aggressive thinking is unrewarded.

Prescription. Remedies include removing unsalvageable performers and working hard at retaining people you don't want to lose (Arana, 2). While we are at it, a little job security, job training, and recognition wouldn't hurt. Effective managements know that an unhappy army wins no wars. Many health care organizations are currently experiencing an identity crisis. When businesses in any industry are undergoing a thorough redefinition demanded by external market forces, leaders often experience a period when they simply don't understand the business. In this rocky phase when the plane spins out of control, executives frantically search for answers, trying various approaches. This problem is now manifesting itself in health care (Short 13). In its worst manifestation, management often succumbs to a succession of fads, installing a long succession of "programs of the month," and creating change fatigue in the workforce (Sachdeva 189). In your own organization, do managers know what the organization is trying to accomplish? Is there a consistent direction?

Because the leaders set the standards, it is essential that we understand the nature of this failure. The search for new and better ways of leading our health care organizations requires confronting the elements of leadership thinking that are not working, so we can replace them, and amplify factors that are effective. It will also help if we think of this failure as less a failure of dedicated people and, as we will learn, more a failure of a management approach. It is not blame but understanding that we seek (Reitemeier 75). There is reason to believe that the management approach that worked in the past is largely useless and inapplicable now. A totally changed set of operating needs now requires us to totally rethink the work of management.

All leaders can fail; all leaders can improve. And health care leadership approaches badly need improvement. None want to fail, none set out to fail, but fail they do. When failure involves health care delivery, the results can be tragic for the community, for the jobs lost, for the patients injured or dead, and for reputations lost. The good news is that the idea of continuous improvement applies to what people do as well. What can we do to get on to new and better approaches in the job at hand? If standards are to be raised in health care generally, they will need to be raised first among the leaders of the industry. No leader asks others to do what she isn't willing to do herself. Current management standards and practices in the industry are too low; in some cases they are unethically low. A related problem is that management practice standards are often unknown or non-uniform within individual organizations, much less in multiunit systems, thus resulting in lower profitability, efficiency, and Customer satisfaction. Make no mistake, our organizations' futures rest in large part on improving management practice standards (Arana, 5).

Standards in American health care organizations and delivery will rise in direct proportion to the increased quality of health care leaders' performance. (Yedidia 635) The men and women who lead the hospital industry deserve our highest regard (Senge 23). With few exceptions they are people of intellect, courage, and character. But organizational failure and disruption must always be placed at the door of leadership. That's where the buck stops (Ridenour 99). When results are not the best, hard questions have to be asked. To begin working our way out of the forest we don't need criticism, but a critique. Failures, where they have occurred, may be failures of a system of managing rather than those of individual people as leaders. Whatever the causes, we need to understand them if we are to move forward.

Conclusion & Findings

In a study by Deloitte & Touche, as reported in Arana, (12) it was found that only 7% of respondents had cut or eliminated patient services when merging or joining larger organizations, thus losing the opportunity to combine services and achieve substantial efficiencies (Short 18). It is interesting that the administrative side was where service consolidations had occurred (31% combined accounting and finance, 28% combined billing and collections); perhaps because it was easier to do or politically more acceptable (Cohen 44).

What emerges from these efforts are two essential understandings. First, in spite of whatever evidence may exist to the contrary, system building will continue apace in the hospital industry. Whether the battlefield is risky is immaterial, for the battle is joined. Some individual hospitals may decide to remain solo or stay in modest-sized systems where problems are more manageable, at least until some future time when some of the cloud over the battlefield has dissipated. But for most, the name of the game is "go system" (Daugherty 649). The second understanding is the need to get under control the elements of change management that can reduce risk and maximize chances for success. Like surgeons dealing with high-risk surgery, we need to control as many factors as possible surrounding this operation if we are to increase chances for success. Current experience suggests that hospital chains are putting their first standardization efforts into clinical protocols where potentially huge gains can be made in both quality and cost), finance get common financial reports for apples-to-apples measurement and consolidated reporting, information systems a common basis for communications and a key foundational element for future standardization work, and purchasing initially for substantial cost reduction, with future cost reductions coming from reducing the number of suppliers and supply variations (Green et. al 155).