Despite investing over $236 billion in healthcare innovation in recent years, the U.S. health outcomes are far behind fellow OECD countries. There’s no shortage of reasons for the failures in the U.S. healthcare system, but why is it that the healthcare industry lags others in its ability to adjust and innovate?
“To say we have a leadership crisis in the healthcare industry may be the understatement of the decade,” writes Sachin Jain, CEO of the Scan Health Plan.
“Health system executives struggle with reconciling innovation with the downsides of disrupting long-standing culture and workflows,” asserts Jaan Sidorov, former CEO of the PA Clinical Network.
This is not to suggest that health system leaders are incompetent or ill-intentioned. I believe they are part of a broader system that is not structured to effectively innovate. However, transformation does require leaders who understand that culture and behavior are the bastions of change and required for the level of innovation needed.
When structures are put in place that make the new desired behaviors easier to do, culture starts to evolve. Culture and behavior follow process innovations. Health system leaders need to evolve their management systems, and commit to new structures with discipline. Redesigning management systems can build skills and behaviors that more effectively distribute leadership, sustain routines, and continuously direct focus on strategic priorities like innovation.
What does ideal healthcare industry leadership look like?
Structure and discipline may seem contradictory to innovation, but consider Pixar, a quintessential icon of creativity. According to Wharton professor Kartik Hosanager, Pixar’s incomparable success stems from their ability to “combine [structured processes] and innovation to good effect.”
Understanding the difference between traditional management systems (which most health system leaders still follow) and transformational management systems is the first step. But awareness alone will not result in meaningful change. Leaders need to establish processes that will make the following behaviors easier to do.
- Make decisions with long-term focus and address root causes
- Celebrate problem identification as opportunity to improve
- Structure daily activities that are made up of disciplined routines that proactively address problems
- Ensure individuals make decisions that optimize for the efficiency of the system
- Invest time to implement continuous small improvements
- Have leaders who set the vision and enable individuals closest to the problems to solve them
- Focus on outcomes and the processes that will produce the desired outcome
But how can health system leaders adopt new management systems? To build transformational management systems in a more sustainable way, here are four steps I believe health systems must follow.
Build buy-in
Leaders must engineer conditions that increase the probability of success. Enough people need to see the benefits for the movement to result in wide-spread culture change. Start by identifying leaders that recognize the need for and are open to change (including changing their own behaviors). These leaders then develop clear messaging for their teams, starting with the why. As author Simon Sinek writes, “people don’t buy what you do; they buy why you do it.”
Leaders must be present, provide coaching toward new skills, and reward success no matter how small. It is critical that buy-in is built across all levels of an organization, from frontline healthcare workers to the board of directors.
Set expectations appropriately
No initiative should be considered a “silver bullet” that will quickly result in overnight success. Innovation and change requires hard work and time. The team may not see results right away when considering traditional metrics used to measure success. Leaders should measure success using metrics that better reflect behavior change. And know that the “J Curve” is coming. Change can make workers afraid or even angry. Fortunately, there are tools leaders can use to develop strategies to help teams adjust. And leaders can set healthy expectations to make sure teams are not disappointed.
Adopt an adaptive and culturally appropriate approach
It can be tempting to adopt a purist approach, striving to quickly adopt all of the practices of a new management system. Leaders may hire consultants from advanced organizations to help guide their teams in the transition. But be cautious. Experts can focus too heavily on the technical components and lose sight of the people part of change. It is important to meet the team where they are and to ensure the team is not only bought in but also driving the change.
Align goals and incentives
Healthcare organizations today often set a multitude of goals, some of which can even be contradictory. (For example: “see more patients” and also “lower utilization.”) Individuals have a fixed amount of time and energy. A key part of a leader’s role is to make the strategic decisions that focus that energy in an effective way, setting goals accordingly. Effectively pairing goals with incentives (monetary or otherwise) can provide a clear and purposeful pathway and, when aligned across an entire organization, build a team of individuals all focused on the same goal.
It may seem surprising that no health system has successfully evolved its management systems. Many have started the journey but most have, officially or not, abandoned the pursuit. After several attempts met with fierce resistance, I have found that many leaders are hesitant to continue putting their careers on the line, and eventually acquiesce to the status quo.
Creating discipline and structure out of an organization that lacks it upfront is incredibly difficult. After all, people have been managed a certain way their entire careers and have developed habits to succeed in those environments. However, just because it has not been a “silver bullet” does not mean that it should be disregarded. Structured processes and discipline are exactly what is needed to consistently shift behavior in a way that allows a system to capitalize on the cutting-edge new innovations being developed every day. New management systems have transformed other industries and can do the same for health systems, something that is so desperately needed.