Printed in OR Managers Magazine for May 2017, Vol 33 No 5
Healthcare lags behind other industries when it comes to innovation. That’s partly because new treatments must be vetted for safety and efficacy, and partly because fee-for-service reimbursement sparked little incentive for creativity and efficiency. Under value-based purchasing, OR leaders have more opportunity to be innovative, but first they must understand what innovation is (and isn’t) and the ways in which they can promote it.
“Innovation is creating something completely new that doesn’t exist in the world,” says John Kenagy, MD, director of Kenagy & Associates in Longview, Washington, and a clinical professor of surgery at the University of Washington, Seattle.
Ohio University’s Heritage College of Osteopathic Medicine and OhioHealth Doctors Hospital in Columbus, Ohio are collaborating to explore creating Ideal Patient Care in both Undergraduate and Graduate Medical Education. Starting November 2016 in a single OhioHealth Doctors Hospital unit, the objective is to develop Adaptive Design throughout the hospital and simultaneously link to Ohio University’s medical student, resident and fellowship education programs.
For more information, contact us!
More Consultants and Technologies? Or the Right Consultant and Technology?
My years as a physician, healthcare executive, academic researcher and patient have taught me one thing for sure: in acute care medicine and management, although our predictions and estimates are usually correct, we really don’t know what’s going to happen tomorrow.
If you are a clinician, you know as soon as you say, “Boy, it sure is quiet tonight,” the ambulances from a crash of a busload of hemophiliacs arrive. For an executive, it’s always another unexpected cost, drop in volume, unfunded mandate, regulation, or audit that disrupts our best-laid plans. We live in an unpredictable world because unexpected, unpredictable things happen.
Most of us intuitively know that is true – but why is healthcare so unpredictable?
Maybe it’s because we don’t have enough rigorous, data-driven management systems in place (e.g., Lean, Six Sigma, Activity Based Costing, Compliance and Control); or we don’t have enough technology (e.g., EHR’s, Data Warehouses, Enterprise Resource Planning systems).
Are tighter management and more data systems the answers? How would we know? One option is to do a Root Cause Analysis. So let’s “Ask ‘Why’ five times,” using the mindset of a traditional executive decision maker.
- Why is healthcare unpredictable? Because our work is not standardized.
- Why is our work not standardized? Because we have too much process variation.
- Why do we have process variation? Because we haven’t gathered and analyzed enough data, done enough projects/Kaizens and implemented enough standard work, e., not enough project-based, process reengineering and control.
- Why not enough data, projects and implementations? Because that’s a lot of work requiring many experts doing lots of work to help reengineer processes.
- Why are too much work and not enough experts & technology a problem? Because we haven’t hired enough expert consultants and bought enough technology to standardize Best Practices and eliminate variation throughout the organization.
So, the answer must be: hire more consultants and buy more technology. Wrong!
This is exactly what we have been doing at steadily increasing rates and costs for the last forty years. Despite all our hard work and the diligent efforts of many committed intelligent people, no large healthcare organization can consistently provide more access to better, safer care at continually lower cost. That is the value-driven healthcare problem we must solve.
I’m not optimistic that “trying harder” with more consultants and technology is the answer. I see our current situation analogous to Dilbert’s:
Think about your healthcare organization. Is Dilbert a cartoon, or a documentary?
If it is a documentary, you work in an organization that frequently hires consultants and uses technology to eliminate variation and implement new, machine-like, efficiency systems.
If that fits, don’t feel alone. These traditional “Mindsets, Methods, Strategies and Structures (M2S2)” are present in established organizations, both in and outside of healthcare.
In my four years as a Visiting Scholar at Harvard Business School, I discovered our data up/implement down M2S2 was built on management systems born in the Industrial Revolution of the late 19th Century and then brought to fruition with more consultants and technology in the mid 20th Century.
Now, the problem is our 21st Century world is much more complex, dynamic, and unpredictable, particularly in healthcare. So, should we hire more consultants, buy more technology and try harder?
The evidence shows that is not the right question to ask. Why? – Let’s put it this way: buying more forks will not make it easier to eat soup. It’s not more; it’s the right consultants and technology that will make the difference.
Here’s why (a quote from my book in Chapter 8),
“Exact medicine can no more be achieved than exact history. Because no human story with a foreordained plot can be anything but a fiction.”
Traditional 20th Century consultants and technologies eliminate variation and increase control to effectively Make, Standardize and Sell profitable products and services. The objective was to implement “the plot” of standard work, compliance and control. In the simpler world of the Mid-20th Century, it worked and success was built on “Make/Standardize/Sell.“
In the unpredictably complex world of today, the compliance and control “plot” has become a fiction. We are great at improving what we know how to do, but find it almost impossible to adapt and do what we don’t know how to do: e.g., organically innovate. Harvard Business School and many other researchers’ data are clear; 95% of established organizations fail to innovate outside the framework of their current success. They fail to Sense, Respond and Adapt.
This is not a fight; Make/Standardize/Sell systems are still important, but most managers are pretty good at doing that already. It’s just that success in 21st Century, value-driven, healthcare requires a Sense/Respond/Adapt capability that traditional consultants and technology reengineering processes and standardizing work can’t deliver.
Like exact medicine, exact management can no more be achieved than exact history. Key to success in an unpredictable work is the ability to Sense, Respond and Adapt.
So, it’s not more; it’s the right consultants and technology. Fortunately, the history of innovation is clear about what the right consultants and technologies will do. They will:
- Support current Make/Standardize/Sell capabilities
- Simultaneously enable organizations to Sense/Respond/Adapt to create new value products and services.
- Understand the secret of success: it’s not either/or, it’s
What do you think? Do we need more consultants and technology or the right consultants and technology? And, if so, how would you identify them?
This is the first in a series of Agile, Adaptive Leadership Innovation M2S2 Guides designed to help you identify the right consultants and technologies to better manage in the present and Sense/Respond/Adapt to make the future. In the next we explore the characteristics of Make/Standardize/Sell and Sense/Respond/Adapt in complex organizations.
Many people sense that the way healthcare is run today has been stretched to the limits. And it’s not just a healthcare problem.
“In survey after survey, business people make it clear that in their view, companies are places of dread and drudgery, not passion or purpose. Further, it applies not to just the powerless at the bottom of the hierarchy. Beyond a façade of success, many top leaders are tired of the power games and infighting; despite their desperately overloaded schedules, they feel a vague sense of emptiness.”
This a quote form The Future of Management is Teal; a fascinating history of the evolution of human organizations from 10,000 years ago to the present day by Frederic Laloux in Strategy+Business.
This interview originally appeared in the SPEAKING.com Blog
Dr. John Kenagy is a well-respected physician, executive, academic researcher and lecturer with a unique view of healthcare. Forbes magazine featured Dr. Kenagy as “the man who would save healthcare.”
Success in 21st century healthcare requires more than excellence,
it requires an organization to succeed seeking value rather than volume.
SPEAKING.COM: What are some of the common characteristics shared by successful healthcare organizations?
KENAGY: Excellent care is obviously important, but Centers of Excellence (CoE’s) have been around for a long time – it’s a 90’s term and times have changed. Success in 21st century healthcare requires more than excellence, it requires an organization to succeed in seeking value rather than volume. They work differently than traditional CoE’s, therefore I call them Centers of Value and Excellence (CoVE’s). Characteristics of a successful healthcare CoVE’s include:
a. A clear, consistent, meaningful and patient-centric Value Proposition.
b. Flexible, responsive, interdisciplinary care teams with everyone working at the top of his or her license.
We commonly hear that “implementing Best Practices” is one of the solutions for creating new value in healthcare. I recently came across a social media exchange describing research that shows: ‘it takes an average of 17 years for discoveries about best practices to become part of everyday clinical care.”
17 years?! Yes! It is a well-documented fact. Continue reading
I have used Adaptive Design in clinics & hospitals nationwide and always see the positive results & innovation that generates more and better care at continually lower cost. But it can be difficult to comprehend working adaptively because “you cannot know until you see; and you cannot see until you do.”
Interview & podcast were recorded by Dr. Larry McEvoy for The Physician Effectiveness Project through the Community Consult Podcast
How To Reduce the Cost of Harm and Impact the Bottom Line
Tuesday, February 3, 2015
Douglas Dotan, President and founding partner of CRG Medical, Inc.
Quang Ngo, MPH, PMP, TORCH Foundation President/CEO
Anngail Smith, MS, Vice President of Operations at CRG Medical, Inc.
John Kenagy, M.D., MPA, of Kenagy & Associates, creator of the Adaptive Design system
Description: On January 1, 2015 the Texas Department of State Health Services (DSHS) will require all hospitals and ambulatory surgery centers to submit to it reports of potentially preventable adverse events (PAEs). The Continue reading