Executive Dialogue Series
Performance Improvement in the Era of Quality Improvement
Published in partnership with Wellspring Partners LTD
Health care organizations are under tremendous internal and external pressure to improve quality of care while simultaneously maintaining or improving financial performance. To be successful, hospitals will need to develop a systematic approach to achieve quality excellence within the economic constraints of today’s payment systems. Health Forum convened a group of health care executives, trustees and industry executives and leaders July 14th in San Francisco to examine the dynamics between financial performance, patient and employee satisfaction and clinical quality. The closed-door discussion focused on benchmarking performance, critical success factors, roles and responsibilities of the board, management and medical staff, and the decision-making process. Health Forum would like to thank all of the participants for their open and candid discussion, as well as Wellspring Partners for sponsoring this event.
MODERATOR:
(Richard Wade, AHA): You might think the title of this roundtable, “Performance Improvement in the Era of Quality Improvement,” is a little redundant. The terms performance improvement and quality improvement are often used interchangeably. But I suspect the terms actually mean different things to different people within an organization. In some organizations the head of quality and the head of finance may feel like they are competitors instead of teammates working to improve quality and outcomes within the facility. How can health care leaders close that gap? When you are trying to improve performance on the business side and clinical side, how do you get everybody in the organization to think similarly about the issues?
GARY KAPLAN
(Virginia Mason Medical Center): I’ve seen this kind of dynamic in organizations that I’ve worked with in the past and it’s a difficult situation to overcome. At my current organization—Virginia Mason Medical Center—we’ve made significant strides in this area. Over the past five years, the organization’s mind-set has evolved. We’ve come to believe that quality improvement and performance improvement are the same side of the coin. We’ve come to believe that as we work to improve quality, we are improving our economic performance.
There’s a distinction, however. I’m not saying that because we improve quality, we will be more competitive or we will be able to demonstrate to our employers and our payers that they should send their patients to us because we provide a better product. Rather, our approach to improving quality and our approach to improving economics is a relentless war on waste. The health care system is full of waste. All of our processes are full of waste. Waste is in many ways the root cause of defects and poor quality in health care.
The saying, “You get what you pay for,” comes to mind. In health care, that means you would have to pay more to provide better quality care. I think the correlation is inversely proportioned. If you take waste out and reduce your cost position, you are actually removing defects from the system and improving the safety and quality in the process.
Let me get back to your question about how to close the gap among people with disparate views within an organization. Our new way of thinking allows us to close the gap and not talk out of both sides of our mouth. It allows us to align the different stakeholders, including our senior executive team, the management team and clinicians around the exact same work. Improving quality by taking out waste leads to superior economic performance and to a better, stronger competitive position.
MODERATOR: Your remarks reminded me of something Peter Drucker has said about hospital CEOs. He said that the hospital CEO position is the only job in the world that’s more difficult than the role of senior pastor because hospital CEOs don’t control anything. Instead, they manage flocks inside of their organization. Gary, did you have trouble getting one or more subsets of people in your organization on board? Describe that a little bit. How did you get everyone in the same mind-set?
KAPLAN: This is a work in progress. We don’t have all the answers. We have a good system in place and the support of our core physician group. They are employed by the system. That helps a lot. We don’t want to be a hospital that physicians use as a workshop and then go back to their offices and do whatever they want, however they want. We try to think about the whole continuum of care from the outpatient and inpatient perspectives. We have worked hard on building a solid foundation as we embarked on this work. We have worked closely with our physicians. We’ve worked to identify the obligations of our organization to its doctors. And conversely, we’ve worked to identify the obligations of our doctors to the organization. We’ve thought this through for leadership, too. All supervisors have a sense of what their obligation is to the organization and what the organization’s obligations are to them. That’s one of the ways that we focus on the foundational elements. We encourage everyone to think in this way, and most jump on board. It gives them a sense of power. It helps everyone understand what is expected of them.
As part of our process and quality improvement initiative, we’ve adopted principles from Toyota’s lean manufacturing process to reduce waste throughout our system. It’s been very effective. We’ve taken 17 physicians, nurses, managers, leaders and front-line staff to Japan to learn the process and watch it in action at the Toyota plant. Many people go over there skeptical about its value, but every single person comes home believing that they want to be a champion of the process within the organization. This process helped us build a good relationship with our employees, and it’s helped us retain good employees as well.
GEORGE WHETSELL
(Wellspring Partners): I’m sure some organizations would comment that Virginia Mason was able to send people to Japan and be successful because the organization already has a lot of money. Too often, many organizations use the lack of financial resources as an excuse not to do anything. There is always some excuse for why they can’t get into the process, redesign and focus on taking the waste out. They think it will cost them too much money. So they just keep doing what they’ve always been doing. They don’t make any effort to change because they feel they don’t have the finances to back it up.
KAPLAN: I hear that all the time. People always ask me what’s the return on investment for our initiative? And they are surprised when I can’t give them an exact figure, which I can’t do because it is exceedingly difficult to measure. I’m not too worried about knowing the specifics. But I do believe that the return on investment of this endeavor will be the greatest return of any investment we have ever had in our history.
That does create a challenge, though. It makes it more difficult to get people excited about a project when you can’t give them a sense of the return on investment. It would help to get people energized and motivated.
KEVIN LOFTON
(Catholic Health Initiatives): Quality improvement and performance improvement are the same side of the coin. But we use both terms to distinguish clinical initiatives and business initiatives. Clearly, on the quality side, you have to get physician champions. There is no way that you are going to be able to make any progress until you can line up a physician or a group of physicians who are buying into what you are selling. Indeed, what you are selling them is an effort to work together using evidence-based medicine, data and information to arrive at a place that will ultimately benefit all our patients. Performance improvement is usually a little easier to achieve than quality improvement because it doesn’t require a change in the practice of medicine.
It’s really about changing processes. You have to have a process in place in order to achieve true change. If you don’t involve your employees, if you don’t have a systematic process in place, then you are going to fail. You may achieve some short-term returns, but you will lose in the long run.
In addition to implementing specific processes and tools to facilitate quality and process improvement, we’re also focused on sustainability. We’re devoting a lot of time, energy and resources toward developing change agents in our organization, to develop expertise internally. We essentially are developing in-house consultants that we can use throughout the process. We think that will help us keep the process on track.
MODERATOR: Is anybody else around the table dealing with getting the organization into the same mind-set in a different way?
ANITA VAUGHN
(Baptist Memorial Hospital for Women): We are much smaller than Gary’s organization. We have 140 beds. Quality improvement and performance improvement are interchangeable terms to me. The key is transparency and having everyone, all 600 of our employees, know what we are doing. We do that in a couple of different ways.
We have performance improvement committees that bring all of the stakeholders together from each department. They report on issues of relevance and receive input and ideas from others on the topic. We also hold quarterly town hall meetings that are attended by leadership. All employees are invited; about 50 percent to 60 percent attend. We give a state of the union address. We want everyone to know exactly how we are doing on our overall quality indicators and our satisfaction indicators. We report how we are doing financially.
We shouldn’t do any of this if we can’t relate it back to our mission, vision and values, so we base it all on that. We celebrate our successes and we go around the room and remind individuals that they are a part of the process. We remind them that they do play a role in improving quality and performance improvement. We tell them how they can help us improve financially and how they can help us improve the quality of patient care that we deliver. It’s been very successful. It helps to be open with everyone.
MODERATOR: If somebody in the community happened to be in the hospital and took a wrong turn and walked into the town hall meeting, would you be comfortable with that?
VAUGHN: Oh, yes. Absolutely. We have a community advisory board comprising 18 members. We are very open with them and I would welcome the community to the town hall meetings.
WHETSELL: Transparency is a difficult thing to accomplish because it changes the way people are used to working. In many instances senior executives, and others as well, aren’t used to that level of communication. It can be awkward in the beginning. Getting the town hall meetings up and running and well-attended takes time. How do you get everybody motivated and excited? How do you get everyone involved in the process, versus standing on the sidelines and not doing anything?
VAUGHN: The key is communication, as you mentioned. People have to know and understand the big picture. It’s amazing how much people are in the dark about their organizations. Once they understand the reason behind your initiative, the support will come. People respond to calls for excellence. They want to excel at what they do. They want to be nationally recognized. So that’s one of our goals, to really be at the forefront of quality. I do believe that financial strength is driven by quality. It’s not the other way around. Quality also provides value to the community. We really focus on doing whatever we can to make the community healthier.
There are so many different components; quality isn’t just an isolated issue in a vacuum. Everyone has a hand in it. Everyone has a contribution to make, whether it contributes to a stronger financial organization or better patient care or more satisfied physicians. As a result, we have very specific expectations for everyone. We have behavioral expectations that influence who we hire and who we select to be leaders within the organization. We’ve been very selective over the last several years of who we have in leadership positions.
All of this is important because we expect everyone to be perfect, so everyone needs to know how they can meet our expectations. When we first began this process, we had tremendous turnover. If people aren’t comfortable with what we are trying to do and don’t support the idea of excelling and contributing, then we don’t need them.
MODERATOR: About a quarter of the nation’s hospitals are operating in the red today, and about 40 percent are operating a little bit above water. If your hospital has been operating right on the edge and you want to begin an effort toward quality and performance improvement, can you convince people that you can get to that other level? Will it be difficult to get everyone on board when they are nervous about the financial future of the institution? Can quality and performance improvement be achieved without dropping large sums of money? Can quality improvement and performance improvement be achieved on an incremental basis?
LOFTON: Most of what I speak about today reflects my experience with Catholic Health Initiatives, but I’ve also been the CEO at two university hospitals. My first experience was at a hospital in Washington, D.C., that was losing tens of millions of dollars, and we had only about $100,000 in cash. My second experience was in Alabama at an organization that was doing fairly well, but was trying to take it to the next level. For me, it is easier to accomplish change in a place that is going down the tubes because people know change has to be made.
MODERATOR: A lot of people around the table are nodding, which surprises me.
LOFTON: In struggling hospitals, there’s no level of doubt that change is necessary. You don’t have to convince people. It requires diligence; someone has to take change and involve people and stay on top of things for it to be successful. But it is much harder to convince people of the need for change at an organization that is doing fairly well. You have to really make the case for stepping things up and trying to take it to the next level.
MODERATOR: You recognized that as a leader, but did other people deep in the struggling organization feel the same?
LOFTON: Absolutely. The hospital in Washington, D.C., that I’m referring to is Howard University Hospital. There were three unions at the hospital. Within a short period of time, I was able to establish direct communication with all employees. I still had to work with the unions, but the employees believed in me and believed in our efforts to turn the organization around.
We had to make a lot of difficult decisions, but we involved everyone in the process. We held town hall meetings. We set up an employee steering committee where employees could present ideas to me. I would take their ideas to the department head and hold the department leaders accountable for making the change. The staff responded to that because they saw that management was being held accountable. The employees saw that they weren’t being held solely accountable for the organization’s progress. In the other scenario—a hospital doing fairly well—it’s completely different. It requires a different approach, a different set of skills.
MODERATOR: I suspect that your boards are very important to you in this process. How important are they? How can they speed or stymie the process? A lot of trustees are going to read this discussion and their organizations will be in the midst of quality and performance improvement initiatives. How can trustees and hospital executives interact on this topic? What’s the expectation of the board’s involvement?
DAVID GIBBS
(Robert Packer Hospital): Quality is a big driver for the board. It’s so important to us. We are frustrated that we can’t spend more money to get to where we want to be faster. We’re counting on the implementation of information systems to help us achieve our quality goals. The information systems will provide us with the quality measures we need to make improvements on the clinical side. It will provide us with real-time evidence to support our clinical initiatives.
We just wish it could be done faster. We’re three years into a five-year strategic and capital plan. But we see consistent progress, and we continue to apply pressure on senior leadership. The CEO knows how important this is to us.
MODERATOR: Has quality always been the driver from the board’s point of view? Or has it changed over time? A lot of trustees might say they’ve been preoccupied with financial performance. Was there a shift on your board? What caused it?
GIBBS: There have been several shifts. For a long time, we had a false perception about the quality of the services that we provide. We felt that we were providing top quality services, but we didn’t have the measurement to prove it. We had a big bond issue; we built a new surgical wing for $30 million. Our rating dropped from A to B and the interest rates went up. We are recovering from that. We geared our comeback on what it means to be a quality organization. And we worked with our service lines to adopt evidence-based practices. We are working on core credentialing, which is new to us.
I don’t know how it is with other systems, but quality is a greater focus for every employee, up to the board. It is one of the most important things that we have decided to do because if we have great quality, everything else will fall into place.
LINDA BROWN
(Lee Memorial Health System): We have increased the amount of time that the board spends on quality. A third of our meetings are exclusively devoted to quality, and our board members spend individual time attending seminars and meetings, learning more about quality. We have one board member out of 10 who is a liaison to the executive leadership and who manages quality. He reports back to the board. We have a dashboard report every month rather than quarterly. That provides a written indicator on quality. We also get an in-depth quarterly report. So we are constantly looking at how well we are doing. We ask a lot of questions. As board chair, I encourage other board members to learn as much as they can, and I provide them with materials to help them learn more.
We never focused so much on quality, and it has been tough because trustees have other jobs. They have limited time to learn and understand quality and outcomes. But they are making strides. It’s an exciting challenge because you can’t understand finance today unless you understand the outcomes of quality and how it affects the bottom line.
MODERATOR: Jack, how does your board track quality?
JACK BUCKLEY
(St. Joseph Health System): We look at a whole series of dashboards. The trick is to get the board members to drill down on the data. We don’t want them to be satisfied by looking at a chart. We want them to question and understand what the chart represents. Are we getting better? Are we getting worse, and if so, why? What is being done to improve quality? It takes a while, but the board needs to be engaged so they begin to question things on their own. It’s an ongoing process. The board needs to be educated. It will help them be more accountable for what’s happening in the organization. They need to consider whether you are measuring the right things. Is it time to change how you’ve been doing things? That will provide the board a level of understanding sufficient enough for them to help you make the right decisions.
ANN SCHRADER
(HealthEast): It’s amazing to me how we all have gone through the same thing. It’s been an evolution for all of our organizations. Yet we all approach it differently. On our board, we have integrated the members of the finance committee with the quality committee. That way the board isn’t only looking at financial indicators; they look at financial and quality indicators at the same time.
They really take the time to think about things and are doing the same drill-down techniques that Jack discussed. Our board takes a big-picture look at quality as opposed to looking at specific indicators and specific metrics. They look at trends, but ask questions to understand the root causes and the background. The discussions are particularly enlightening, not only for the board members themselves. They also provide a wealth of information to physicians and the members of the management team who are on the quality committee.
LOFTON: It is one thing to say that quality discussions make up 30 percent or 50 percent of the board’s agenda. But if you are not giving the board the right information, or if the board is not having the discussion at the right level, it is meaningless. Each organization needs to really look at what the board needs to do to direct management. What measures do they need? How do we assign accountability?
It’s also important to place quality at the top of the agenda. That places prominence to the issue and makes sure it gets addressed at all meetings. Less important issues should be placed at the bottom of the board’s agenda, so if time runs out, it’s not as big of a deal.
KAPLAN: For any of us to execute quality and performance improvement initiatives, we have to have alignment and accountability, and that starts with the board. The board is designed to be the voice of the customer. In the hospital business, there’s often confusion about who the customer is. Is it the physician? The referring physician? The patient? The payer? Our board has really helped us focus on the patient.
We need our boards to hold us accountable to ensure we have alignment throughout the organization. We are trying to deeply immerse our board in our improvement processes. We take a board member with us on every trip to Japan. It has been critical to ensure they have an understanding of what we are doing. It builds their knowledge base around our management method.
WHETSELL: We often hear from hospitals that the boards aren’t really engaged. That raises the question about who is holding senior leadership accountable. If hospitals are doing poorly financially, then boards are likely not paying attention to quality.
On the other hand, there are many boards that are highly engaged and are very independent. High-performing organizations tend to have very engaged boards. If the boards don’t see the level of performance they expect, they will do something about it.
KATHRYN MCDONAGH
(Christus Spohn Health System): The recent corporate scandals have brought the issue of board responsibility to the spotlight. Everyone questioned where the boards were in all of this. As a result, boards have become more aware about what’s going on within the organizations for which they serve. I’ve noticed a change when interviewing potential candidates for serving on the board. They are asking really good questions. Nobody wants to take on the risk until they really understand what their obligations are.
I still feel that we have room for improvement in health care. We need a more systematic process of having balanced boards and promoting robust discussions. I limit the amount of time that staff has to present reports to the board. It’s better to have short reports and longer dialogue.
VAUGHN: Our system holds joint conference meetings attended by the five hospital CEOs, five medical staff presidents and four board members to discuss quality. One of the goals they have issued is for us to be in the top 10 percent of the publicly reported indicators. We carefully review our results. Where have we been successful? How can we continue to improve? It’s a good process because it links us with our medical staff. We can work through the issues together.
BUCKLEY: When I joined St. Joseph, I looked at one of the board agendas and noticed that each committee had prepared their own materials in silos. The financial officer had a 300-page finance report, for example. That’s the way it had been done for years and years. They wanted to be sure that they had every potential question covered. But we changed that. Now it’s a 10-page report, and it contains pretty good financial information and some good comparative ratios.
I believe that where there is good governance, there is good service. Where there is good financial performance, there is good quality. But we’re now looking at it from the perspective that where there is good quality, there is good financial performance.
MODERATOR: Let’s talk about indicators. Every hospital has a set of data they give to their board. We’re moving toward greater transparency in health care. There are different rating organizations and Web sites available. There’s so much out there now that it’s confusing to the public. It’s hard to find meaning in all of the disparate information. How do you stay on target inside your institution with all of this stuff swirling around you? And then how do you pick and choose what you are going to take back to your community and say this is what you can rely on? How is somebody dealing with that?
BUCKLEY: Hospital leaders, the board, senior management and even front-line employees have to work out what the relevant indicators are, concentrate on those and move forward.
SCHRADER: It’s a difficult task. The matrix of quality indicators is so overwhelming that you have to hone it down to something meaningful to the organizations. On the financial side, it’s not as daunting.
WHETSELL: It is true that there are so many measures and so many benchmarks out there that it’s hard to achieve focus. Training and education is a big part of it. Otherwise no one is going to be able to sort out the appropriate measures for the organization. And you run the risk of the data becoming irrelevant.
Training and education will help everyone understand what it is you are trying to accomplish. It has to occur from senior leadership down to the front line. People need to know how to go about improving performance. Once they know, they will likely be motivated and enthusiastic about doing it. Having standardized metrics will help because everyone will know where you stand in reaching your goals.
KAPLAN: It’s exciting work, actually. In our area, the Puget Sound Health Alliance was formed two years ago to create transparency in health care. The group consists of policy stakeholders, major employers, major payers, all of the providers and community representatives. It’s pretty exciting. They are creating an agreed-upon data set, at least for our market. For employers to participate, they have to agree to pay for performance based on the established data sets.
There are other pockets working on this, including the Pacific Business Group on Health and other business coalitions. I don’t know where this is going to go. It could be beneficial for the state boards to agree on a data set. That would help create alignment and set priorities. The industry has to find a way to work together on this to sort it out. It needs to be thought through with the patient in mind. How is this going to add value to the patient?
MODERATOR: There seems to be a consensus here that if you focus on quality, the money will follow. Is that always true? Can this be the mantra for every CEO, board member and medical staff leader? I see some heads shaking. Why?
BUCKLEY: You really have to think about things from the perspective of why you are there and the community that you serve. Business will not necessarily follow quality. It also depends on the dynamics of the business community. Cincinnati, for example, has some very large employers that keep tight reins on their health care dollars. It also depends on the needs of the community.
KAPLAN: I’d like to bring up one element of quality that is critical and is not often talked about, but it ties directly to economic return. It’s appropriateness of care. In our definition of quality, the appropriateness of care and the outcome of care are critical. You can do the best surgical procedure, have the best outcome and have a delighted customer-patient experience with no waste. If we say we are going to take waste out of health care and eliminate inappropriate care, it may eliminate some profit. It might mean that we won’t do MRIs on the 60 percent of the people who come in with lower back pain. Usually, only 10 percent of the patients actually need the MRI and have a change in care as a result. But you are basically taking away the one profitable service from treating back pain patients. We have a payment system in this country that is not aligned with doing everything that’s necessary but only what’s necessary. That’s a big challenge to all of us.
MODERATOR: I see tight lips around the table.
LOFTON: That’s a difficult challenge to approach. The malpractice environment makes it very difficult.
WHETSELL: I’ve seen both sides of the coin. Some of the hospitals with high costs have low quality scores. And some organizations with low costs have high quality scores. Organizations have to provide equal focus on quality and financial performance. In today’s environment, there has to be a balance of the two.
GIBBS: There is no way that you can focus soley on quality in your organization and expect the money to flow. I have been a trustee for a long time. We’ve always been focused on finance. We try to simplify things and get down to the standard, best practice. We find that generally results in cost savings.
The biggest culture change we made to help us go forward in quality was getting rid of any punitive action for reporting mistakes. We encourage the employees to report mistakes or near misses. We try to get them to submit more incident reports. It was hard at first, but establishing a nonpunitive environment helped significantly. Nobody is afraid to report a problem. It was also difficult because when the number of reports increased, we saw that we really did have room for improvement. But, this helped us approach the quality issues and identify problems or potential problems and develop solutions.
MCDONAGH: You have to have a strategically driven budgeting process. A lot of times, hospitals don’t have that. Many just take last year’s budget and make accommodations. Hopefully, a cardiac strategy has to have something to do with quality. The best chief financial officers I have worked with were enlightened in that respect. They understood that resources need to be spent to improve process and quality. It is a different way of looking at how to allocate resources. And it changes the way that we allocate resources.
MODERATOR: If reimbursements are shrinking, the hospital payments from the government are probably as good as they will get. We know our costs are increasing. If we focused on quality, are we going to be able to stay ahead of the cost increase?
SCHRADER: We measure quality. But we also have to balance the cost of quality. We look at a project from a quality perspective and a cost perspective. We thoroughly review all projects. We look at how it will improve the quality of care we provide, as well as the return on investment. And we look at how it will tie into our strategic plan. Our senior management and middle management grades the project based on these elements. They develop scorecards that are then evaluated and used to determine what we take to our board for approval. The board again looks at the project to see if it will improve the quality of care. Does it go along with our strategic plan? Can we afford it? Sometimes we approve a project that won’t enhance our revenue but it is going to enhance our quality of care. But most projects will improve both.
We end up with several lists of approved projects that assign priority. We can’t fund them all. Top priority projects are funded through our capital plan. If the organization receives a philanthropic contribution, we may use that to fund one of the lower priority projects.
KAPLAN: It’s critical that we focus on a cost position. There is emerging data that suggests a better cost position is a necessity of top quality. I want to emphasize that if you focus on taking out waste from your processes, you add quality back to the process. We have five years of data that illustrates that. For example, our expense per dollar has decreased significantly. Our labor costs have remained flat. The health care industry wastes so much money every year on treating preventable complications. We can adopt lean practices from other industries like aviation. As a result, we can remove costs and improve quality. Imagine what we could do if we could put that money back into the health care system.
SCHRADER: It is so intuitive when you think about it. Removing unnecessary steps and unneeded materials is a given. It will lead to better quality outcomes because you have less of a chance for errors. It will free up caregivers to spend more time with patients. We have an ICU quality improvement initiative under way that seeks to decrease the length of stay, decrease infections and decrease antibiotic use, among other things. We saved almost $1 million in one quarter as a result. And that doesn’t factor in how much we made by increasing volume. On top of that, we’ve improved the quality of care that we provide. That helps illustrate how quality can impact the bottom line.
LOFTON: I work for a Catholic organization. If we focused too much on finance, some people would question our commitment to our mission. If we focus too much on quality, some people would question whether we’re ignoring our finances. I give the same response to both sides: It’s all integrated. It’s not an “either or” scenario. You have to have both.
The board and the senior leadership set the tone for the organization. They help set the expectations. Some organizations are satisfied to show improvement. We’re not. We seek zero defects in care.
It really does change the mind-set of the organization. It helps raise the bar.
KAPLAN: Setting high expectations forces you to think and act differently.
WHETSELL: Hospitals need to demand excellence. I worked with an organization last year that had just brought in a new CEO. They had been experiencing all kinds of problems. The new CEO came in and simply drew a line in the sand. He said the organization would be in exactly the 95th percentile or higher on all the patient satisfaction scores. The organization put processes in place to help achieve those gains. But he allowed no excuses. That set the tone for the organization’s improvement initiatives.
SCHRADER: That really gets back to what we have talked about before. It’s a matter of accountability and leadership. There has to be accountability in order for the staff to support leadership and buy in to the process changes. If leadership sets the tone of zero tolerance and supports its achievement, it will happen.
LOFTON: When I first became CEO of the Catholic Health Initiatives, we turned over two-thirds of our CEOs in a one-year period. We couldn’t tolerate individuals who would not buy into our global initiatives. We need everyone’s support if we are going to make things happen.
BUCKLEY: I had to do the same thing. It’s important to get the right people on the right bus in the right seat. It’s necessary in order for us to complete our cultural transformation. That helps you proceed in the direction of obtaining your mission and vision and retaining your values. There are so many different cultures within an organization. Our job is to get everyone aligned. Otherwise, culture will eat strategy. Even if you have the best strategy for creating a quality-driven organization that has a proper balance between finance and quality, the culture has to support it. It’s a matter of continuing to focus on mission, vision and values. That will create cultural change. Then you can put processes in place to drive quality and financial performance. The two go hand in hand.
VAUGHN: It really is about the employees. You have to focus on them.
MODERATOR: That brings something to mind. We have an increasingly diverse workforce. Does that add another element to the equation?
MCDONAGH: We have a very culturally diverse community and a culturally diverse workforce. It’s clear that no matter what culture the individual comes from, they want to strive for excellence.
We need to have culturally competent leadership, and that’s why in our leadership development planning process we mention that we want to make sure that our leaders are diverse and that they buy into the basic premise of our mission. That is an absolute requirement. It’s crucial to have all of the right people in place. Doing that isn’t an easy process; so many organizations have a seniority mind-set. But having the right people in place makes the rest of the process easier.
WHETSELL: We have been doing a lot of this kind of work in urban areas. A while ago, one hospital manager said to me that the organization couldn’t recruit high-quality people. They have to hire the educationally disadvantaged, and that’s why the organization wasn’t performing well. We went in and reorganized and trained and worked side by side with the employees. It was a culturally diverse group and they really wanted to do well. Culture didn’t get in the way at all. If anything, the senior leadership had sort of written them off and said “This is the best we can do because of where we are located.” The employees just needed to be trained and recognized for their efforts.
SCHRADER: Cultural diversity becomes more of a problem at the patient’s bedside. Caregivers may not be aware of certain cultural care protocols. We’re just starting to get our arms around translation. Providing culturally competent care is going to add another level of complexity to the whole quality initiative. We haven’t even begun to uncap it.
KAPLAN: We want a diverse employee culture because we have an increasingly diverse patient population. We have to be prepared to train and to anticipate future challenges.
MODERATOR: The pressure to invest in information technology over the next several years will be enormous. If you are on the quest for quality, the IT investment to-do list will be huge and expensive. How does that play into the balancing act? You are going to be pushed from all sides. Every hospital is going to experience a great deal of pressure about how to spend IT dollars.
WHETSELL: I’ve seen reports that say hospitals have spent tens of millions of dollars on IT and they haven’t been able to show much of a return on investment. As hospitals approach this, they should try to identify the value they are trying to receive, whether it’s quality or cost. You can’t make the investment and simply think that quality will improve as a result. It doesn’t work that way. There’s got to be process improvement in place as well, a redesign effort. Technology will support the change. If you don’t understand how technology is going to support the process, then you probably aren’t doing it right.
I’ve been in hospitals recently that are fully automated but still rely on paper charts. It’s scary because they have invested an enormous amount of money in the adoption and implementation of the technology. They’ve invested in training staff on how to use the technology. If they’ve done this right, they have changed their processes, too. But if they rely on old processes, they aren’t maximizing the value of the technology and won’t achieve the return on investment.
KAPLAN: We’re getting better at making decisions. We’re better at saying no. Our approach is to redesign our processes first and then look at technology. We don’t want to move garbage around at the speed of light. So we change our processes and then see how technology can further improve the delivery of care. If we’re just going to automate garbage, then we are still going to have garbage. We have to look at our processes.
As leaders, we have to set priorities and understand what we are doing and why we are doing it. Our investments have to add value. It’s important to adopt an IT strategic plan and stick with that plan. We get requests all the time for new IT. The IT strategic plans help us understand what we are trying to accomplish and execute our plan.
GIBBS: It’s important for boards to understand the IT plan as well. It’s about discipline, discipline, discipline. That’s where this trait really needs to apply because there is a lot of pressure from various groups within the hospital. The board can help the organization stay disciplined and stick with its strategic plan and direction.
MCDONAGH: It is the role of the board to keep the organization focused on its mission and strategy. But I think it’s just as important that the board help recognize employees and the organization for their accomplishments. That’s something that we haven’t addressed in our discussion. We need to keep people fired up. When everyone works together to improve, patients go home well. They leave the hospital sooner. Recognizing staff for their accomplishments is better than a pay raise. They feel good that someone has recognized what they have accomplished for the patient. It goes a long way.
Panelists:
Linda Brown, Chairman of the Board, Lee Memorial Health System Fort Myers, Fla.
Jack Buckley, President and CEO, St. Joseph Health System, Bryan, Texas
David Gibbs, Chairman of the Board, Robert Packer Hospital, Sayre, Pa.
Gary Kaplan, M.D., Chairman and CEO, Virginia Mason Medical Center, Seattle
Kevin Lofton, President and CEO, Catholic Health Initiatives, Denver
Kathryn McDonagh, President and CEO, Christus Spohn Health System, Corpus Christi, Texas
Ann Schrader, COO, HealthEast, St. Paul, Minn.
Anita Vaughn, CEO, Baptist Memorial Hospital for WomenMemphis, Tenn.
George Whetsell, Principal, Wellspring Partners Chicago
Moderator:
Richard Wade Senior Vice President, Strategic Communications American Hospital Association. Washington, D.C.
Sponsor: Wellspring Partners, Chicago
www.wp-ltd.com
Wellspring Partners is the nationally recognized leader in providing integrated performance improvement services for hospitals. Our approach is unique to the industry—our teams comprise of senior level health care executives and functional specialists. Principals are personally involved in every project and partner with senior management, boards and medical staffs to solve problems and implement both short-term and long-term solutions. Wellspring Partners’ services include organizationwide performance improvement, labor productivity, revenue cycle, non-labor, information technology, physician practice and medical management, strategic repositioning, interim management and operational turnarounds. For more information, visit www.wp-ltd.com or call (312) 345-9050.
Trustee would like to thank the participants for taking part in “Performance Improvement in the Era of Quality Improvement,” with special thanks to our partner, Wellspring Partners.
This article 1st appeared in the December 2099 issue of Trustee Magazine.
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