The People "Variable" in the Healthcare Equation

Posted by Paradigm Learning on May 02, 2014

The People Variable

Healthcare organizations are unlike companies in any other business. Yet, it’s essential to remember that every hospital is still, first and foremost, a business—subject to the same financial pressures as any other. Reflecting on this hard truth, I came across this illuminating quote in a Harvard Business Journal article by business professor Michael E. Porter and former healthcare network president Thomas H. Lee: “Increasing profits is today misaligned with the interests of patients, because profits depend on increasing the volume of services, not delivering good results.”

That’s a tough pill. But based on conversations with a client in the Tampa area, what that statement suggests to senior leaders is not only to recognize the need for change, but also to implement a new approach to drive that change throughout the organization. In our view, this outcome relies on developing a sharp focus around strategic alignment and the ability to translate that understanding into action through people, while eliminating subsequent inconsistencies in execution.

Here are three variables to keep in mind:

  1. Business acumen is more important than ever. Staff members need to clearly understand the financial issues that are common to their industry, as well as the uncommon circumstances that are unique to their hospital. When people at all levels become aligned and learn where they fit into the big picture of success, they can—and will—make smarter decisions and take more efficient actions.
  2. The world doesn’t wait on tomorrow. What worked in the past is no longer relevant for success in the future. The financial levers that drive success today require the ability to act and react quickly. If a hospital isn’t ramping up to meet this reality, chances are it will slowly fall behind.
  3. Silo mentalities drain energy. Breaking down silos and motivating people to make cost-conscious decisions are critical in the best circumstances. Today, given everything we know and don’t-know-yet about change, introducing new practices and behaviors are imperative for financial success.

Healthcare organizations have received a mandate to change and maintaining the status quo won’t meet it. What will is a re-energized effort to build the business acumen of people and their strategic alignment with the goals of the organization—an approach that has an incontrovertible correlation to better health outcomes for the patient and greater ROI for the hospital.

How do you see it? Get back to me with your thoughts and let’s begin the discussion.

Topics: Healthcare, Strategic Alignment, Business Acumen