What if hospital business models weren’t so tribal?

Twin sons of different mothers.  The judgment of Solomon, splitting the baby in half.

Healthcare providers.  Permit me the literary license and allow me to cleave the baby in half as follows:

  • The business of healthcare—how the business is run
  • The healthcare business—the services delivered

I tend to look at it from the perspective of the business model of many hospitals.  What is the delivery model is viewed as a 2.0 model and the business of healthcare, how it is run, is viewed as an 0.2 model. How does one transform a 0.2 business model to function in today’s, let alone tomorrow’s, changing healthcare model?

The delivery model of healthcare, the healthcare business, in juxtaposition to the business of healthcare, would never quarter to the idea of buying millions of dollars of technology without first knowing how they were going to use it.

Plenty can be gained by applying what other industries have done to become more effective, more competitive.  In some respects the inherent model, tribal, cost duplication, and rigid departmental silos remind me a lot of how the various agencies under Homeland Security functioned, operating in isolation, performing much of the same work, and not sharing information.

Other industries operate with a much less tribal model than healthcare.  Hospitals have created tribes and tribal chiefs.  In some hospitals the tribes have names like radiology, general surgery, psychiatry, and OBG/YN.  Other hospitals have redundant tribes named admissions, human resources, IT, and payroll.  Each tribe is run by the tribe’s chief.  The chief’s dominant weapon is his or her budget which is lorded over its individual tribe, and a dispute vehicle with the other tribes.

The tribal organization is more a reflection of how the hospital evolved over the years, not a result of an inept business strategy.  Nobody set out to build an ineffective and internally competitive model, or one that duplicated support functions.  Acquisitions have reinforced and exacerbated the problem, duplicating and increasing costs without yielding a resultant increase in value.

Providers have to interact with and depend upon unknown influences of external influencers that each carry a much bigger stick than do they—payers, pharma, and Washington.  Before the business of healthcare is prepared to cope with the unknowns of the myriad of external influences it will face in the next few years, it must first change how it functions under its current structure.  It might begin by revisiting its present structure and making sure that its performance and quality precede the application of technology.

I frown on using the term efficient.  To me, efficiency implies speed, and doing bad things faster is no solution.  Let us work at improving effectiveness and good things will happen.

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