Are You an Old or New Era Hospital Leader?

With the healthcare industry moving towards accountable care, pay-for-performance models, increased quality demands and population health management, hospitals and health systems are experiencing a revolution. The multiple changes in the industry — not only in philosophy but in regulations — require changes in healthcare leaders. To be successful, hospital and health system leaders will need to be collaborative, transparent and flexible. Here, industry experts describe how an "old era" healthcare leader would approach specific areas of healthcare, and how this approach differs from strategies successful "new era" leaders should take.

Healthcare issue "Old era" leader "New era" leader
Management Hierarchical Collaborative
Hospital-physician relationships Detached Engaged
Community Internally focused Externally focused
Transparency Private Open
The patient experience Episodic Universal
Quality Punitive Instructive
Costs Containment-oriented Growth-oriented


"Old era" leader

In the past, hospitals were designed with a stricter hierarchy where there were a few decision-makers tasking others in the organization with carrying out their decisions. "Historically, a lot of [healthcare] organizations have been set up with an executive command and control approach," says Kevin Fickenscher, MD, president and CEO of AMIA-The American Medical Informatics Association.

"New era" leader
Healthcare leaders are now moving away from a control model towards a model of collaboration, according to Dr. Fickenscher. "The top down system doesn't necessarily foster the most efficient approach toward care delivery. We have to have an integrated approach; we have to have an approach that recognizes that team models are going to be more effective," he says. This team will include not only members of the C-suite, but also members of the medical staff, local physician groups and community.

Establishing a collaborative model does not necessarily mean abandoning certain aspects of the command and control model, however. "Healthcare organizations can have very complex political environments that demand comprehensive, deliberate and sound decision making," says Dave MacDonald, founder and CEO of healthcare consulting firm Aegle Advisors. "Any 'team' needs to have at least one person ([doctor], nurse or administrator) who can step in and make the tough calls." Successful healthcare leaders today need to balance teamwork with strong decision-making skills.

Hospital-physician relationships

"Old era" leader
The level of hospital-physician integration today is a significant departure from past relationships between physicians and hospitals. Previously, hospital executives had limited interactions with physicians at the hospital and often did not include them in strategic planning efforts. "Ten, 20 years ago, there really was sometimes an adversarial relationship between medical staff and the hospital. Physicians were on staff to manage patient care. In many ways the relationship was not very collaborative and inclusive of physicians' thoughts, thus allowing physicians to become active partners and leaders in the organization," says Christopher Cornue, vice president of healthcare analytics company Sg2.

"New era" leader
Today, hospital leaders need to work closely with physicians in developing strategies to improve quality and efficiency in the organization. "Now, with more scrutiny around measurements and outcomes, there needs to be much stronger collaboration between hospitals and physicians because both will be held accountable," Mr. Cornue says. "New era" leaders will need to engage physicians in ways they never have before. These relationships with physicians will help ensure the organization achieves new metrics that may determine part of a hospital's payment. Engaging physicians will require hospital leaders to have strong communication skills and effectively communicate with physicians on an ongoing basis. "Strong communication, engagement skills and the ability to motivate individuals at all levels — that's what will make or break healthcare organizations in the future," Mr. Cornue says.


"Old era" leader
In the past, there was not as much of a focus on population health as there is now, and healthcare leaders may not have proactively reached out to the community to manage patients' health. "Many old era leaders were focused internally — inside the hospital and sometimes more office based," says Brian Krehbiel, vice president of B. E. Smith, a leadership solutions company. Leading a hospital in the past may have emphasized ensuring the success of the hospital as a single entity more than building the hospital's role in the community.

"New era" leader

Today, as new models such as accountable care organizations and patient-centered medical homes arise, hospital leaders need to partner with community groups and organizations external to the hospital to improve quality and reduce cost. "New era leaders will need to be outward-focused community leaders. They will need to bring the healthcare message into the schools, churches and establishments of everyday life in a way that has not been seen. New era leaders will need to be extraverts who are comfortable in this role," Mr. Krehbiel says.

One of the ways hospital executives are moving closer to the community is by partnering with retail clinics and building urgent care centers to treat patients in a less costly, outpatient setting. Hospitals are also collaborating with nursing facilities to ensure patients are taken care of after discharge and avoid readmissions. "Healthcare leaders need to recognize that it is no longer about the institution," Dr. Fickenscher says. "It is more about how we extend the healthcare delivery process into the home."


"Old era" leader
In the past, financial and clinical performance data on hospitals were not readily available and patients mostly relied on their primary care physicians when choosing a hospital. Hospital leaders and consumers rarely interacted and the hospital's strategic plan was kept an internal affair.

"New era" leader
Today, CMS and other organizations have made hospitals' performance data easily accessible to patients, who are becoming more involved in their healthcare decisions. Hospital leaders need to accept and embrace transparency to gain the trust of consumers, their employees and physicians, which is necessary to building lasting relationships. "Healthcare leaders need to recognize they're working in a transparent world," Dr. Fickenscher says. "If they can't tolerate it, they're not going to survive in healthcare. Openness is crucial."

In addition, as hospitals begin to partner with community organizations and physicians in reducing readmissions and other initiatives, hospital leaders will be forced to become more transparent about their strategy. "Today, integration efforts by healthcare leaders have had to become much more transparent," says Heather Kopecky, PhD, senior client partner in healthcare services at Korn/Ferry International, an executive recruitment company. "Organizations have to be able to clearly articulate why an integration strategy is necessary and what the role of the medical group is in this process."

The patient experience

"Old era" leader
Years ago, hospital leaders did not prioritize improving the overall patient experience. While they did look at patient satisfaction, improvement efforts focused more on increasing survey scores instead of exploring ways to deliver excellence in patients' experience from a service perspective as well as in clinical outcomes, according to Mr. Cornue.

"New era" leader
In the current healthcare environment, hospital leaders are becoming acutely aware of patient satisfaction and the patient experience, as payment systems such as value-based purchasing will allocate payments based partly on scores from the Hospital Consumer Assessment of Healthcare Providers and Systems survey. Hospital executives' efforts are now going beyond increasing the survey score. "They're really focusing on the broader experience rather than the specific score. When done effectively, the scores will naturally follow," Mr. Cornue says.

This broader approach requires an assessment of the hospital's culture and long-term goals. "To achieve lasting success in the future, hospitals first define and then engage staff to execute the target, or ideal experience. They will understand and strive for continuous improvement in delivering the "non-negotiables" — the defining characteristics of experience that should never change," says Linda Ireland, a partner with global strategy and operational change firm Aveus.


"Old era" leader
In the past, hospital leaders were not incentivized to improve quality the same way as today. Now, providers are beginning to be penalized for too many readmissions, not following evidence-based standards of care and other quality-related measures. Leaders' approach to quality in the past was thus different than the approach today. "Quality initiatives often focused on symptoms of a larger problem, not necessarily [the] root cause that could be expensive to remediate," Mr. Krehbiel says. In addition, hospital leaders tended to punish employees who violated a patient safety or quality standard, according to Dr. Kopecky.

"New era" leader

Now, hospital leaders prioritize quality initiatives and strive to create a culture of quality. They use methods such as Lean and Six Sigma to do a root cause analysis of problems and focus on educating employees and physicians about quality protocols. "Today, healthcare leaders emphasize blame-free environments so that any team member is able to report errors or near errors without fear of retaliation," Dr. Kopecky says. "Continuous education is used so that team members understand their role in situations where there is high risk and can feel safe speaking up."


"Old era" leader
Before healthcare reform, hospital leaders responded to declining reimbursement primarily by focusing on cost containment, according to Mr. Krehbiel. As with quality, they may not have looked at the root cause for high costs and instead made cuts in certain departments' budgets without understanding the true source of the high costs.

"New era" leader
Today's leaders have begun trying to reduce costs by decreasing inappropriate utilization of high-cost services, such as encouraging non-emergent patients to seek care in lower cost, appropriate settings outside of the emergency department, according to Mr. Cornue. Hospital leaders will also need to move beyond cost containment and into revenue growth. "Cost containment will be important, but the real winners in the market will focus on driving new revenue, margin and the overall patient and physician experience. Leaders that can accomplish this will avert outward patient migration and will have the revenue needed to continue to enhance the overall patient experience," Mr. Krehbiel says.

More Articles on Hospital Leadership:

Energy Management: Why Leaders Should Value Rest as Much as Work
Establishing the Right Culture: 4 Healthcare Leaders on What Makes Great Leadership

10 Challenges Healthcare CEOs Can No Longer Ignore

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