Strategy

Is it time to fire Winston?

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I was reporting to the board—or bored—sometimes it is the same.  The mission: figure out what was wrong, and then fix it.

I spent weeks talking to everyone from the executives to the receptionist.  I interviewed patients and physicians.  The doctors were not happy, the patients less so.  Costs were up, charges were down, and quality was down.

Of all the gin joints in all the towns…

The problem was easy to decipher.  I presented my findings.

“What do you recommend?” asked the chair of the audit committee.

I tried to look lost in thought.  “I fired Winston,” I replied.

“Why Winston?”

“Winston was where it all led; quality, cost, satisfaction.  Winston was responsible for the failures.”

Several members of the board nodded, and spoke among themselves.

After several minutes I jumped back into the fray.  “The more I think about it, the more I think Winston may be salvageable—not in the same role but somewhere else in the organization.  The employees really like him.  Besides, it’s the holidays.  Do you really want to be the reason Winston is not able to buy presents for the kids?”

The board held an in camera discussion.  “Agreed.”

I knew they would.  I started with my actual presentation.  “There is no Winston.”  The Winstons scattered around the table looked perplexed.  They were looking for the easy answer to the problems in their organization, they were looking for themselves.

Who are your Winstons?

Strategy–The land of small ideas

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Hangin’ by a thread

“It will feel better when it quits hurtin’.” Well duh.  It will also feel better when we stop self-inflicting the hurt.

To help me understand how things work I need to decompose issues, not into small parts, but into a series of pictures or shapes.  The pictures I come up with represent my particular perspective of how things look.  That can be a far cry from how others view them.  Maybe that stems from when I was a child and enjoying putting puzzles together upside down.

Instead if hitting myself over the head with a hammer, I set aside the easy pieces—those with straight edges and the four corners.

The puzzle was equally complete no matter whether you worked with the picture or just the shapes, but the exercise was quite different.  The advantage in doing it my way is that upon staring at 500 pieces of cardboard backing I had to bring different problem solving skills to the table.  The disadvantage is that once I could picture the solution in my mind, I lost all interest in completing the last few pieces of the puzzle.

I find myself looking at coming up with a reasoned approach for attacking the large provider healthcare business model.  Puzzle pieces are scattered across my desk; some right-side up, others right-side down.

Here’s where the process breaks down or breaks up—I am sure the direction is irrelevant.  How does one change someone that either does not want to change or one who thinks change is not needed?

Just because you think you’re being followed does not mean you are paranoid—it could mean you are the only one with enough focus to know what is happening.  Charging someone eight dollars for a bag of popcorn to keep your business afloat is not insightful, frankly, it is embarrassing.  Charging forty dollars to check a bag on a plane does not earn a CEO the Baldridge Award, it only allows the airline to lose less money, to stave off inevitable bankruptcy a little bit longer.  Eastern, Pan-Am, Braniff, TWA, Republic, Northwest, Piedmont, Midway, Independence.  They proved the same thing.  Continuing to use the same failed strategy delivered the same failed result.  Just because the first five people to jump off the garage roof couldn’t fly doesn’t mean you can’t.  Or does it?  Bigger wasn’t better, was it?

What does it cost to fly from New York to Seattle?  It depends.  What does it cost to have an angioplasty on Philadelphia?  It depends.  Did the airlines adopt their pricing model from hospitals, or was it the other way around?  Does it matter?  Probably not.

The land of small ideas, like Monty Python’s silly walks.  Somebody actually comes up with these ideas.  I doubt it is someone on the board.  People who lead do not one day lose their marbles and decry, “Our model is not working, let’s start charging passengers if they sit during the flight.”

If staying afloat requires a hospital to charge eight dollars a unit for Tylenol, the land of small ideas is winning.

Why business strategies are so rigid

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From mathematics–In a Nash equilibrium, no player has an incentive to deviate from the strategy chosen since no player can choose a better strategy given the choices of the other players.

My rewording of the corollary, “No employee who disagrees with the corporate strategy remains an employee.”

Is your mission statement merely decorative parsley?

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What is your organization’s mission, your vision, your goal?  Can you articulate it?  If yes, write it below in the space provided.

Okay.  Why do you have a mission statement?  Is it of any more value than the parsley on your Denny’s Grand Slam breakfast plate, or is it actionable?  What does it tell you to do?  Is it something to which all of your employees can contribute?  Can you measure if your actions helped meet the mission?  Does the business strategy result from the mission statement?

Here’s one you probably haven’t thought of.  Let’s say every one of your employees puts your mission statement into action.  Does that improve your organization, or does it bring it to its knees?  Your mission statement either communicates your mission or it does not.  What does it say to your employees, to your customers?  If it does not create a message that makes you unique, fix it or dump it—or say, “We are just like those other guys down the street.”  Just because it communicates, does not make your mission sustainable.

Here are some real examples of hospital mission/vision statements.  Read them and see if you begin to understand why I think the hospital business model is in trouble.  I have not published the name of the hospital, as that is not what is important to this discussion.

Providing exemplary physical, emotional and spiritual care for each of our patients and their families

Balancing the continued commitment to the care of the poor and those most in need with the provision of highly specialized services to a broader community

Building a work environment where each person is valued, respected and has an opportunity for personal and professional growth

Advancing excellence in health services education

Fostering a culture of discovery in all of our activities and supporting exemplary health sciences research

Strengthening our relationships with universities, colleges, other hospitals, agencies and our community

Provide quality health services and facilities for the community, to promote wellness, to relieve suffering, and to restore health as swiftly, safely, and humanely as it can be done, consistent with the best service we can give at the highest value for all concerned

We are caring people operating an extraordinary community hospital.

Ensure access to superior quality integrated health care for our community and expand access for underserved populations within the community. Create a supportive team environment for patients, employees, and clinical staff.

Let’s look at some of the million dollar words in the mission statements of some highly regarded hospitals.  Ensure, foster, promote, participate, create.  Comprehensive.  Involved, responsive, collaborate, enable, facilitate, passion, best, unparalleled, .  These statements were written by well paid adults.  These statements are awful.  They are awful because they are fluff—unachievable.  They are well intentioned but meaningless euphemisms.

Hospital mission statements are inclusive to the nth degree.  They also seem very similar.  If a perspective patient read your mission statement and read the mission statement of the hospital down the street, could they tell which one is yours?  Probably not.  Who among you has a mission statement which excludes anything?

So, let’s say your board is debating if you should buy the machine in Monty Python’s hospital skit—the machine that goes “Ping.”  Which of the mission’s goals does that support?

How do you make them better?  For starters, make them short. Very.  One writer wrote, “If I had more time, I would have written less.

Southwest Airline’s mission statement—be the low cost carrier.

Dramatic pause.  Something either contributes to the mission or it does not.  Leather seats and free lunches do not.

 

 

Is this today’s evolving healthcare strategy?

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Did the large provider healthcare model go from making all the ducks better to only making some of the ducks better?  Please let me know if the concept depicted below makes sense.

Thanks

What if there was no Meaningful Use?

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On April 16, 1912 there was an article in the Daily Register in Anytown, Nebraska titled “Local Man Drowns.”  The article went on to note that a local man was lost at sea.  I paused for a moment trying to recall from my high school geography class the name of the ocean bordering Nebraska—there is not one.

It did not take long to realize that the newspaper was guilty of being more than a little parochial.  April 14, 1912 was the day the Titanic sunk.  The man in question had been lost at sea in much the same manner that the real headline of the story had been lost by the newspaper.

I think a lot of important healthcare IT headlines are being lost, and those loses can in large part be attributed to the puppet masters at the ONC and CMS.  It is difficult to swing a dead cat in a hospital cafeteria without hitting someone discussing Meaningful Use.  On the other hand, you could swing a blue whale without hitting someone talking about ICD-10.

The headlines are both buried and misinterpreted.  Some of the HIT headlines merit being repeated—feel free to use a highlighter on your screen to be able to locate the important ones.  Trying to meet Meaningful Use:

  • Is optional.
  • Does not mean you will meet it.
  • Could require most of your IT resources.
  • Means you may not have enough resources focused on ICD-10.

While these may appear to be trivial comments, misapplying your efforts could cost a large hospital more than tem million dollars.  Then figure another ten million to rectify the mess.

Ask yourself one question before you hire a pricey consulting firm to help you figure out how to meet Meaningful Use.

“What would we be doing if there was no Meaningful Use?”

Then do that.  Meeting Meaningful Use was never a part of your business strategy—you probably will not find it written in your three-year plan.  Did anyone sign off on the notion of spending millions of dollars to complete a task that has no ROI and has a reasonable probability of failing?

If it so happens that in pursuing your original strategy you can still meet Meaningful Use that is good.  The reverse is not so good.

Does it come in blue?

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The store for audiophile wannabe’s. Denver, Colorado. The first store I hit after blowing an entire paycheck at REI when I moved to Colorado.

The first thing I noticed was the lack of clutter, the lack of inventory. There were no amplifiers, because amplifiers were down market. There were a dozen or so each of the pre-amps, tuners, turntables, reel to reel tape decks, and these things called CD players. They also had dozens of speakers. At the back of the store was an enclosed 10 x 10 foot sound proof room with a leather chair positioned dead center.

When the ponytailed salesperson asked about my budget, like a rube I told him I didn’t have one. He beamed and took that to mean it was unlimited. It really meant I hadn’t thought of one. He asked me what I liked to listen to.

“Pink Floyd, Dark Side of the Moon.”

Within a few seconds I was seated in Captain Kirk’s chair, and Pink Floyd’s Brain Damage filled the room in pure digital quadraphonic sound. I was in love.

I lived a block and a half away. Since the equipment wouldn’t fit in my Triumph, I made several trips carrying home my new toys—gold plated monster cable, solid maple speakers that rested on nails so as to minimize distortion, a pre-amp, tuner, receiver, turntable, and stylus.

It wasn’t that I deliberately bought stuff I didn’t need. I walked in uneducated. I had never bought what I was looking at. I didn’t know how much to spend, nor what it would do for me. Looking back at that purchase decision, I bought specs I didn’t need. I didn’t realize it was possible to build audio technology that would meet performance specs beyond what I person could hear, heck beyond what anything could hear. Not understanding that possibility, I bought specs I couldn’t hear. I spent hundreds of dollars on features from which I would never receive value. You too?

It happens all the time. Stereos. Cars. Computers. Applications. Technology. Having bought it doesn’t mean it was needed, or that it was the right thing to do, or that it has an ROI, or that it meets the mission.

The cool thing is that even though I could not hear half the features of my new stereo, it looked really, really impressive.

The McDonald’s healthcare business model

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Sarah Palin continues to receive national media coverage.  Many hospitals continue to implement EHR without any measurable goals.  (One of those is bad.)

The year is 2014.  I had this dream the other night of having dropped my IQ when I was at the hospital, but I couldn’t remember which hospital, so off I went, hospital by hospital looking for my IQ—I realize there are those of you who believe this isn’t a great loss.

In the first hospital I visited, a photo of the new president hung behind the registration desk.  Next to her photo—surprised some of you with that I bet—hung the photo of the Secretary of Hospital Sameness.  For a while I wondered what someone in that position did day to day.  The more hospitals I visited, the more apparent it became.  The hospitals all looked very much alike, right down to dust on the fake Fichus tree next to the water fountain.  For a while I thought that maybe I was driving in circles until I noticed that even though receptionists were all named Gladys, they wore different clothes.  It was almost like visiting Stepford.

Does anyone have the sense that what reform will really accomplish is to reform away healthcare competition?  There appears to be a move afoot towards the efficiency that is created by sameness—what I call the McDonalds healthcare model.  Put one on every corner.  Make them identical.  Limit the options.  Everyone gets a burger.  Nobody gets a steak.

Eliminate waste.  Does that mean eliminate ways of operating that differ from how the government permits them to operate?  There is talk of pulling costs out of the system thereby making it more efficient.  You tell me.  Is the argument that there is so much inefficiency that by becoming efficient not only will we be able to cover everyone, but we will be able to do it at a cost below what it costs to care for far fewer people?

How do you understand it?  Are costs being removed, or simply moved?  If someone with no access to healthcare suddenly has healthcare—a good thing by almost anyone’s standards—the reasoned person knows costs have just increased.  (Healthcare theorem 1:  The cost to provide healthcare to 2 people is greater than or equal to the cost to provide it to one person.)  If costs have increased, how does one make a believable argument that the basis for reform is cost reduction?

I try hard not to be too cynical, but sometimes I think, why bother.  By the way, I found my IQ.  Thanks for asking.

Disruptive Strategies: a business imperative

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When you think about it, companies begin to die the day they are born.  Some last longer than others, and some are reborn after they die–think GM.  Others may be caught in a death by stagnation spiral.  Microsoft may be a good example–has their lack of innovation caught up to them, or is Windows 37.9 considered innovative?

Disruption.  If you do not like the word, here are a few others that work just as well–disassemble, dismantle, unhinge, and disengage. Disruption is only a first step.  Once you disrupt you then must rebuild. Knowing what to rebuild is the critical success factor.

My new favorite business toy is Prezi.com.  This Prezi link is for a speech I gave last year at ICSI on why disruption is not only good for hospitals, but may in fact be a survival imperative.

For those who like to read bullet points, this presentation may not be for you.  I welcome your feedback on the tool and the ideas, especially since I wrote very little text.  I approach presenting ideas by trying to get the audience to listen to what is said rather than simply reading slides–otherwise I my being there would be superfluous.  Besides, people don’t take notes at the movies, why should they during a talk.

http://prezi.com/ved_jyx95m_d/

How many Sigmas does it take to change a hospital?

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I wrote this in response to some comments I received on my piece in HospitalImpact.org.

I do not advocate assembly line medicine, especially at a hospital. I go out of my way to stay out of the healthcare business–the clinical side of healthcare–an area in which I have no background other than having been a patient.  There seems to be an inability to answer basic business questions relating to how the business of healthcare is run.

On the care side there is a need for the independence and the je ne sais quoi nature of care. However, the business of healthcare and the healthcare business can coexist in a more business-like manner. There are hospitals which get it right, and those which get it much less right.

Some of the ineffectiveness of running a hospital like a business has to do with costs, some with waste–wasted time, wasted opportunity, some with inefficiency, and some with poor planning. If one hospital can do procedure X for thirty percent less than another, it is worth exploring what accounts for the delta. If another hospital can perform twenty percent more procedures with the same level of resources, that is worth investigating. There is no point keeping metrics unless one is willing to improve them.

I am not big on efficiency. In most cases, efficiency implies speed. It is possible to perform poor processes at a speed which will make your head spin. Lots of hospitals are toying with Lean. Lean works best with a valid set of processes. Without a valid set of processes–best processes–there are not enough Sigmas to justify the expense.  To those lauding how many Six-Sigma professionals they have employed, what have they done for you?  Are you better off than those hospitals who only have Five-Sigma specialists?  Would you be better served if you cranked it up a notch or two to Seven or Eight-Sigma gurus?

Then there are the cost cutting advocates. Cost cutting alone is a dead end strategy.  Every manager can cut costs–less than one in a hundred can increase revenues. What do you do when there are no more costs to cut? Are you more effective, or net-net did you simply replace the brewed coffee with Folgers? Want to cut costs? Lock the doors. But that does not solve anything.

If none of these questions can be answered today, what happens in five years? New entrants will have gobbled up many profitable services and will be able to do so because they do not have “Big Box” overhead. Reform will have forced another business model on large providers. Payors and pharma will continue to battle for their share of each healthcare dollar.

I think hospitals can grab an even larger portion of that dollar, but I do not think they can do it without changing how they approach the business of healthcare.