Signs Health Care Needs to Transform Before it Can Reform

While organizational culture and leadership varies from organization to organization, industry sectors often evolve to display cumulative similarities. Shared competitive pressures, market-driven resource constraints, cross-pollination of leadership ideals, generational and cultural influences, and government regulations are contributing factors.  Shared market drivers create sector-related confluences of leadership styles, structural similarities and strikingly familiar challenges when it comes to cultivating and sustaining engaging, adaptive organizational cultures.  Perhaps no other industry shares such similar market drivers as health care.  The common mission, environment, and economic constraints, from one system to another, align closely.  A canvasing of the recent health care leadership surveys, industry reports, and management research, when taken together, paint a sobering picture of staid mindsets, cultural artifacts, and an industry barely functioning in survival mode.  The research strongly suggests that even before health care can even begin to come to grips with reform, the sector needs to transform many of its prevailing perspectives, perceptions and practices.

Here’s a sobering reality; across all industries, 70% of change management initiatives fail.  Why?  The reason for failure can be traced to a disconnect somewhere along the leadership, strategy, and organizational culture continuum.  In my experience, where you find one disconnect, you’ll find others.  If change management initiatives fail in companies with far fewer moving parts operating in less stressful, less complex environments, we can begin to appreciate the monumental challenges our health care providers are facing in the very near future.  Health care reform will place even more focus on the coordination of care, intra and inter-organizationally, and on the patient’s experience; meaning connection, engagement, communication, and inspiring, transformational leadership will become more important than ever.

Change, on both an individual level and organizational level, has a pre-requisite condition in order for it to emerge; self-awareness.  Research from Applied Behavioral Economics clearly demonstrates we often perceive value and make economic decisions from our conditioned, often unconscious, emotional biases.  This disconnect between rational thought and conditioned, emotional bias reveals itself in incongruent leadership which then leads to flawed strategies, inaction, and results in creating a disengaging, often toxic organizational culture.

Here are some of what could be seen as early warning disconnects in health care that will need to be authentically addressed for transformation to occur:

When hospital and health care system leaders were asked about the current state of the health care industry 25% stated it’s on the right track.  When asked the same question about their own organization, 66% believed they were on the right track.  Correspondingly, 46% said the industry is on the wrong track but only 12% thought their organization is on the wrong track1.  When nurse leaders were asked the same question 47% thought the industry was on the wrong track, but only 17% thought they’re organization was on the wrong track2.  Do these perceptions have implications for strategic planning, and specifically, what is the potential impact on the Self-Assessment process?

Clear, open, concise communication is a critical element for delivering positive patient outcomes.  Breakdowns in communication can lead to medication errors, poor patient experiences, and adverse events.  A recent report issued by the Department of Health and Human Services discovered upwards of seven out of eight adverse events in hospitals are not properly reported.  This should be a major communicative and cultural red flag for leadership.

Another indicator of disconnected communication and dysfunctional culture is the rate of physician abuse and disrespect reported towards nurses.  The fact that this is even warrants reporting in 2012 is a cultural statement in and of itself.  When nurse leaders were asked if physician abuse and disrespect towards nurses was common in their institution 42% stated it was common and 58% stated it was uncommon.  When physicians from the same institutions were asked the same question 13% said it was common and 88% stated it was uncommon3.  That’s a remarkable disparity of perception for people working so closely together and under such demanding circumstances!

When hospital leaders were asked what the single greatest strategic challenges their organizations’ face 62% ranked care coordination/continuum of care, improving patent experience (including patient flow), and reducing avoidable readmissions and complications, in that order4.  What’s at immediate odds with this last strategic challenge is, depending on the demographics a hospital serves, any where from 15% to 25% of their gross revenues are derived by readmissions.  In addition, 71% of leaders stated their organization will be migrating to a collaborative care model such as an accountable care organization (ACO) within the next three to five years5.

When hospital leaders were asked what were the inhibiting factors they were facing to move towards a collaborative model, 51% stated physicians’ perceived value of relationships were a significant hinderance.  In addition, 59% of hospital leaders said self-interests among stakeholders keeps the industry from solving its problems6.  Sixty-six percent of nurse leaders thought self-interests were hindering progress as well7.  The research on on physician alignment goes on to report that 77% of independent physicians are only partially engaged or actually disengaged with the hospital in which they have privileges8.

These strategic challenges and the migration to participating in a collaborative care model will all require substantial engagement, a highly inclusive attitude, diversity of creative thinking, and measurable improvements in cross-functional, cross-organizational communication.  Operational goals that, from the research, appear to be a long ways off from the current state of affairs.

Health care reform will also apply performance metrics to the patient’s experience.  In response, health care systems and hospitals are exploring patient experience strategies, but report they face stumbling blocks in doing so.  Here’s how they ranked the stumbling blocks to creating patient experience strategies:

  •   22% – Abundance of higher priorities
  •   22% – Lack of cultural fit or employee buy-in
  •   12% – Lack of an overall game plan or actionable ideas
  •   12% – Lack of management consensus and alignment
  •   11% – Lack of funding or budgetary priority
  •     5% – Lack of justification for return on investment
  •     4% – Lack of appropriate structure.

Only 12% of leaders reported they were encountering no stumbling blocks in creating new patient-centric strategies9.

Let’s take a look at these impediments for a moment and ask ourselves, “What is the source of these challenges?”

The first thing I notice is the only thing in abundance is higher priorities, but to be fair, hospitals are dynamic and unique in their mission.  Hospitals are not factories or software companies.  What I find especially interesting is what is revealed following the term Lack:  of cultural fit, of employee engagement, of clarity of communication, of actionable ideas, of vision, of leaderships’ consensus and alignment, of misalignment of structure.  It reads like a case study of why 70% of  change management initiatives fail!

While 62% of hospital leaders blame the government and insurance companies for “the healthcare industry mess”10 (both parties do contribute remarkable constraints and costs to the industry) I struggle to see how these strategic challenges are the fault of outside parties.  These strategic impediments indicate severe disconnects exist between leadership, strategy and organizational culture.

Witt/Kieffer, one of the nation’s leading recruiting firm specializing in health care, issued a report in January of 2012 entitled, “Diversity As A Business Builder In Healthcare” (Advancing Diversity in Health Care – Witt:Kieffer 2012) identifying additional disconnects in perceptions.  John Combes, senior vice president of the American Hospital Association (AHA) and president of AHA’s Center for Healthcare Governance, recently reflected their findings in his statement, “The boardroom doesn’t reflect the community.”

He’s right.  Ninety percent of board members for hospitals and health systems are caucasians.  But the disconnect in perceptions revealed in this study goes deeper.  The study revealed 60% of caucasian health care leaders believed their cultural diversity programs are effective while only 33% of minority health care professionals agree.  The inclusion of diverse perspectives (and the creative thinking that it sparks) that align with the customer base an organization serves is critical for any business, but even more so in health care where cultural perspectives impact adherence to prescribed care and the cost of re-admittance of under-insured demographics.

Taken cumulatively, these systemic disconnects reveal a lack of organizational and leadership self-awareness that is the hallmark of failed change management initiatives.  Before our health care system can even begin to effectively explore how their going to functionally respond and comply with health care reform they need to address some deep, fundamental issues.  Health care leaders would be well served to take a step back and review how they’re going to train and groom mindful leadership as the first step in repairing and cultivating  diverse, inclusive, and  engaging organizational cultures that will be essential for creating and implementing the adaptive strategies they will inevitably have to deploy.

1 “Reform’s Impact: Staff and Service Cuts Expected”, HealthLeaders Media Intelligence Report, December, 2012.

2 “Nurse Leaders Report”, HealthLeaders Media Intelligence Report, Industry Survey 2112.

3 Ibid.

4 “Overall Cross-Sector Report”, HealthLeaders Media Intelligence, Industry Survey, 2012.

5 “Physician Alignment: The Collaborative Care Disconnection” HealthLeaders Media Intelligence Report, September, 2011.

6 Op. Cit., “Overall Cross-Sector Report”.

7 Op. Cit., “Nurse Leaders Report”.

8 Op. Cit., “Physician Alignment”.

9 “The New Patient Experience Imperative”, HealthLeaders Media Intelligence Report, August, 2011.

10 Op. Cit., “Overall Cross-Sector Report”

© 2012, Terry Murray

1 Comment

Filed under Health Care, Leadership Development, Organizational Culture, Strategic Planning

One response to “Signs Health Care Needs to Transform Before it Can Reform

  1. Pingback: Exploring the Root Cause of Our Dysfunctional Health Care System | Leadership Development and Team Building

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