Healthcare is Complex, And We Aren't Helping by Making It More Complicated


Healthcare is as complex an industry as any, and is becoming even more so. Highly fragmented, and largely thought of a type of service you don't want to need, the industry has long suffered from a lack of coordination, high variability and failure to ties costs to quality. In our efforts to "fix" this, leading a healthcare organization has become even more complicated. There's little doubt that integration and population health will lead to lower costs, better outcomes and better health, but getting there isn't easy. Leaders who were once tasked with overseeing a single acute-care hospital, or group of hospitals, now oversee a portfolio of hospitals, employed physician groups, outpatient centers and contracts with retail health providers, community hospital affiliates, professional services groups and more. The list seems to grow monthly.

One impact of this complexity seems to be less effective leadership and organizational performance. One study recently found the number healthcare leaders rated as "struggling" has grown considerably over the last five years, and their expanding responsibilities may explain why this is the case.

There's no sign of this complexity letting up, so how will organizations adapt? What do those that are successful at managing complexity do differently?

Boston Consulting Group has an idea. In a new article, the authors, all BCG consultants, propose the following:

"Many organizations thrive amid this complexity. They sort signals from noise and focus on the opportunities that matter most. 

Others stumble and struggle. They create an overabundance of committees, layers, key performance indicators, processes, and other internal mechanisms. This organizational mishmash fails to address the complexity they face in the outside world."

We see this in healthcare. To deal with the expanding role of the organization amid financial pressures, health systems form numerous committees to set and monitor various KPIs, examine where to cut costs, develop protocols around care, EMRs, technology decisions, etc., etc., etc.

It's worth noting that while a fair amount of the expansion of structures and processes is self-imposed, many result from increasing governmental regulations. This creates a whole separate discussion that is outside the scope of this piece. Instead of arguing over how to stem the tide of complications, I'll focus on accepting it for what it is and how to best deal with it.

Regardless, we've reached a point in healthcare, that for many organizations, their internal workings have become more complicated in response to the outside world becoming more complex.

Should it be the other way around?

Based on discussions with leaders of successful organizations across a variety of industries, the authors of the BCG report suggest the answer is yes.

"Just because the world is becoming more complex, organization structures and processes do not need to follow suit…many organizations unnecessarily create internal complicatedness — procedures, vertical layers, interface structures, coordination bodies, and decision approvals — in response to external complexity.

The end result is that managers spend most of their time shuffling papers and attending meetings and very little time working with their teams. Rather than creating formal guidelines and processes, [organizations should embrace]…an environment in which employees can work with one another to develop creative solutions to complex challenges."

How do organizations cultivate an environment that embraces complexity without creating complication? Here are five of BCG's recommendations.

•    Impart directional vision rather than set detailed, inflexible strategic plans.

•    Favor fluid decision-making over non-flexible guidelines for organizational decisions. Don't be afraid to improve and experiment.

•    Simplify organizational structure and processes. Remove structural and procedural complicatedness so employees can exercise personal judgment.

•    Institutionalize leadership throughout the organization. Avoid relying only on top-down management.

•    Embrace collaboration among employees, units and entities outside the organization.

While the BCG analysis looked at organizations outside healthcare, the lessons hold true for those within the industry. When things are complex, leaders often react by making the organization's structures and processes more complex; instead, they should stem this jerk reaction and embrace fluidity. After all, we've seen numerous organizations prosper (see Zappos, Apple, Google) by stepping back and letting employees embrace uncertainty and complication, under the guidance of leadership's direction and vision, rather than their edicts.


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