Reinventing Healthcare: 5 Strategies for Successfully Leading Change

 

Are CEOs and other C-suite leaders successfully adapting to this unprecedented paradigm shift, or is it too early to judge?

The playbook for hospital and healthcare leadership has fundamentally changed. Integrated hospital systems, academic medical centers, freestanding hospitals — no provider is immune from the need to transform its delivery model to align with the Patient Protection and Affordable Care Act and broader industry reforms. CEOs and their executive teams are tasked with reinventing their organizations to meet the call for a more patient-centric, value-based approach while simultaneously managing traditional, volume-based models.

What's the score? Are CEOs and other C-suite leaders successfully adapting to this unprecedented paradigm shift, or is it too early to judge? Are there accepted paths to successful enterprise-wide transformation? What new playbook "plays" or strategies are proving most effective?

To find answers to these and other questions, we recently held candid conversations with 20 CEOs across the U.S. from a diverse cross-section of healthcare delivery systems. We heard first-hand about changes they are making to transform their organizations, along with the myriad challenges they and their teams are facing along the way.

The new world order
Unilaterally, the CEOs' sentiments echoed what we hear during our daily work with healthcare executives: The healthcare world with which they are accustomed has turned upside down. The primary purpose of hospitals has changed from providing care within their four walls to keeping patients healthy in and out of the hospital.

CEOs must define new strategies for their organizations to succeed. They must establish a cohesive system of care by engaging physicians and improving efficiencies, quality, safety and the patient experience. These demands are forcing them to address their senior talent, as each member must be invested in the process and capable of leading an integrated system.

5 strategies for successful change
Considering the CEOs' perspectives and our insights gained from working directly with C-level executives, we posit the following five strategies as the core of the healthcare industry's new playbook.
 
1. Horizontal and vertical integration must co-exist. Regardless of a healthcare system's size or complexity, breaking through legacy silos and diminishing traditional fragmentation of care are key to creating a successful integrated and patient- centered delivery model. An initial step is defining "integration," with the leadership team identifying the hurdles a system needs to overcome and defining an iterative change process.

Traditionally, senior leaders have been tasked with oversight of their respective business units and some system-wide decisions. Today's playbook calls for a "team-at-the-top" demonstrating true integration, across vertical and horizontal boundaries of care, both within and well outside of the hospital structure. Moving in this direction calls for the team to develop a shared and clear strategic direction around provision of care. Wrestling with an array of complex issues, including infrastructure requirements, organizational structure, partnerships, efficiencies and culture is central to the job of architecting a delivery system positioned for long-term viability.

2. The CEO is the primary agent of change. In the past, a CEO was lauded for being an excellent hospital administrator with strong financial and operational acumen. Today, expectations of the CEO are undergoing a material shift.

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"The lessons we carry with us from the past are not enough. If we can't learn quickly and change, we're toast!"

-CEO,West Coast community hospital system

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Contemporary CEOs must be change agents who can win the "hearts and minds" of employees, physicians, the community and a diverse array of stakeholders. A CEO in the new world order must have sufficient vision to fully understand the complex, strategic and practical implications of reform in order to lead the team, transform the organization and achieve new metrics of success.

Building delivery systems focused on access, quality and the patient experience requires alliances previously unimagined or impossible, often extending care across vast geographical regions. The CEO and his or her team must think broadly, entertain unfamiliar and often uncomfortable frameworks, operate well in ambiguity, set a high bar for performance and demonstrate the core values that underlie action. Those CEOs who remain a step ahead will flourish, while those who lag behind will become obsolete.

3. Culture is a business imperative. Culture no longer is about the soft side of business. Without the "right" culture, the best-laid operational plans will stagnate in the vertical hierarchy or fail from poor execution. Forward-thinking CEOs are quickly realizing that command and control leadership ultimately breeds mediocrity. Influence is the name of the game in today's era in which patients, staff, physicians and diverse stakeholders must all be engaged to achieve results. To further complicate matters, as hospitals swiftly merge or acquire to remain relevant, conflicting cultures and values may lead to stunted growth and performance.

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"We need to select partners who share the same mission and values.If you find out early-on they don't, get out…"

-CEO, Northwest hospital system

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While wizened CEOs and executive teams are champions of culture transformation initiatives, they also acknowledge that the process is lengthy and difficult.

Accordingly, culture has become one of their top priorities. An increasing number of hospital CEOs are hiring outside expertise to guide them through a multi-year process of culture change, starting with aligning the C-suite around goals, values, process and commitment. Those experiencing success understand that changing the culture requires ownership by the CEO and full support from all members of the executive team and physician leadership.

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"My job is to lead an orchestra. I expect every member of the executive team to take full personal responsibility to leading change and demonstrating our vision, mission and values.We expect only top performers who fit at the top. If you don't fit, you don't get to stay."

 

-CEO, Midwest hospital within large national system

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4. A new world calls for new executive skills. CEOs across the country acknowledge that building a care-centric delivery system calls for executives who have a unique combination of both analytical and relational skills. They must be team players, think strategically and operationally, wear multiple hats, and effectively   lead and inspire others toward enterprise-wide change.

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"We need leaders who not only can ensure that 'the trains run on time' but can build and manage a network of care.This requires a different skill set than in the past when we focused on maximizing hospital volume."

-CEO, Midwest hospital system

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Analytically, they must understand the dramatic shifts taking place in the industry and grasp the many implications for business and operations. Relationally, they must forge partnerships, establish trust and implement change within the organization and with strategic partners. Sheer intellect, personality and industry acumen are important, but not sufficient for executives who must think systemically and build complicated networks of care.

Many CEOs are restructuring their teams to yield greater impact with fewer people. In some cases, they are accessing talent from other industries to diversify skills and introduce fresh perspectives needed to create a sustainable delivery system.

5. Identify and focus on the important. Across the board, the CEOs we spoke with are concerned about the volume and velocity of work everyone is facing. Many are worried that top talent will burn out from the perpetual intensity. As noted earlier, introducing a new playbook while continuing to operate a traditional model of care causes substantial "noise" and diversions to overcome. As a result, CEOs must introduce new practices to ensure ongoing interaction and interdependence among senior team members.

In positioning a hospital for long-term success, the CEO, in tandem with executive leadership, needs to regularly step back to reassess priorities, ensure clear focus and continually ask, "What can we stop doing?" To facilitate time for reflection, CEOs are holding quarterly retreats with their executive teams to align interests, priorities and sharpen the focus on what is important. Half-day, weekly executive team meetings are becoming commonplace venues to discuss operations and reinforce strategic priorities, culture, metrics and focus on the patient. Concurrently, a similar conversation is taking place throughout the delivery system. Physicians, managers and employees are becoming engaged as everyone pulls together to learn their positions and roles in the new playbook.

A brave new world
While change is daunting, many of the executives we spoke with are inspired by the new, wide-open landscape before them. "The national change is creating energy," said the head of a faith-based hospital network in the Midwest. The challenge, he noted, is "harnessing that energy to move healthcare in a direction that clearly benefits today's delivery systems — and, most of all, patients and communities."

 

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