3 thoughts on how large systems reach operational excellence

As health systems grow, new opportunities for standardization and investment can materialize. But reaching operational excellence isn't a guarantee, especially as environmental factors like the pandemic hamper operations.

Three leaders from large health systems shared their thoughts on how growing systems can create operational efficiencies during Becker's CEO + CFO Virtual Event. Their Nov. 10 panel was titled, "Strategies to lead and achieve operational excellence in large systems." The panelists were:

  • Pamela Stoyanoff, president and COO of Methodist Health System in Dallas 
  • Terry Shaw, president and CEO of AdventHealth in Altamonte Springs, Fla.
  • Eric Yablonka, CIO and associate dean of Stanford (Calif) Health Care and School of Medicine

Here is an excerpt from the conversation, lightly edited for clarity. To view the full session on demand, click here.

Question: Is achieving and maintaining operational excellence in a large organization more challenging because of the potential variation because of the size and depth, or is it less challenging because of the resources you have available? 

Terry Shaw: In 2000, we were a $2 billion organization. As we've grown into a $12 billion organization, there have been operational efficiencies that have come into that process. They have allowed us to invest in technologies and services that we can deploy across the system to help with variation. As we have increased size and scale over time, it has provided a resource for us to do things more consistently. I've been with the organization for a long time. I've seen the things that we tried to do work and not work. And I can tell you that the resource base we had to lean on was effective at helping us drive change or drive consistency of operations across the enterprise.

Eric Yablonka: I would agree with Terry. There's opportunities in larger organizations, whether it's economies of scale or taking technologies to the next level. At Stanford, we take advantage of that every time we possibly can. But I'm not sure the size really is the factor. You can have an excellent organization of modest size. Our challenge going forward is dealing with all these environmental challenges like the COVID-19 pandemic and social justice matters. These are all things that are impacting our ability to run the organization and to be as efficient and cost-effective as possible. We have to continuously improve, but going forward, it sure seems like the game is going to be different. 

Pam Stoyanoff: You know the old adage: You grow or you die. I do believe that you have to grow, because if you don't continue to grow, you're not relevant and you'll be snuffed out by those larger than you. That said, the bigger you get, the harder it is to achieve savings. A lot of organizations who want to get bigger do that by growing the top line. What they don't think about is how they're going to achieve any economies of scale when they do that. That's why we've seen some failed mergers, or some mergers that haven't delivered the operating performance that they said they would. 

More articles on strategy:
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