At an executive education program held at the University of Lausanne, business executives, policymakers, and health care leaders approached health care delivery from different angles.

HMI partners address challenges of health care management

Thursday, April 21, 2005

Around the world, leaders in government, industry, and academia are wrestling with a common dilemma: how to bring the benefits of technology to patients while keeping health care affordable and accessible. A delicate balance exists between the need to spur economic development through innovations in technology, and the belief that these advances should be made available to patients at a reasonable cost.

The challenges facing today’s health care leaders are complex, but they go beyond the implementation of new technology. The industry is in constant flux. In Europe, a competitive health care market is emerging as cooperation between the public and private sectors helps to supplant the government as the leading sponsor of health care. In China, a quarter century of economic reform has been marked by a gradual move towards privatization, with the government turning some hospitals over to private firms. Globally, the patient population is changing; in developed countries where health care has made great strides, the demographics of disease are shifting from acute to chronic conditions. And the wide availability of health care information has transformed many patients into savvy consumers of medical services. Lastly, there is a growing realization on the part of executives that quality of care, not shiny new equipment, is the most important differentiator in the health care market. Beyond filling their hospitals with the latest technology, hospital managers must build the infrastructure and support mechanisms to create a culture of continuous clinical improvement and consumer satisfaction.

Into this sea of difficulties go today’s health care executives. Who are they? In many instances, particularly in China, they are physicians who have been selected for leadership on the basis of their clinical success. In other cases they are executives from other industries who must familiarize themselves with the specific issues impacting health care delivery. Still others are younger managers stepping into situations where they face entrenched systems and decades-old traditions. Whoever they are, understanding the different forces impacting their hospitals and their health care systems is only part of their challenge.

“The future of health care depends on an understanding of the political, economic, and ethical principles at work, in communities as well as conference rooms,” says Miles Shore, MD. A professor of psychiatry at Harvard Medical School and a visiting scholar at Harvard University’s Kennedy School of Government, Shore teams with HMI and a network of experts around the world to develop programs designed to educate health care executives about those principles.


The business case for health care
A recent article in the Boston Globe pointed to a growing problem in the American health care industry: progress. Medical malpractice premiums are at an all-time high, and administrative costs are ballooning, but health care costs are rising mostly because we continue to figure out ways to use technology to treat and cure disease. We are saving lives, but not saving much money.

It is a problem that health care executives all over the globe will have to deal with, if they are so fortunate.

“Health care is getting more complex, and concomitantly more expensive. Thus the administrative demands are growing exponentially, ” says Shore.

Albert Gillis, RT, MBA, director of health care facilities development at HMI, says that many health care organizations around the world are still developing their operational infrastructure. “In countries where health care is becoming a major segment of the economy, there is a sharper focus on being more patient-oriented and fiscally responsible. Hospitals need people who can appreciate the need for efficient, cost-effective operations based on well thought out budgets (a process that does not exist in many countries) and a capital planning process that takes into consideration the replacement of aging equipment and the addition of new technologies as they enter the marketplace,” said Gillis. Adding this to a patient-focused service will be paramount to the success of many new and existing hospitals “These concepts are still being developed and implemented in some health care systems, but leaders of both private hospital networks and government hospitals are beginning to understand that developing a group of middle managers will be critical to achieving operational efficiency and creating economies of scale, while at the same time putting the patient first.”

Gillis added that HMI has emphasized to partners the importance of organizational structures that push decision-making as far down in the organization as possible. “If you are going to give someone responsibility, they should have the authority to make decisions that impact their area or areas of responsibility,” said Gillis. “One advantage of this is that it allows the top leadership to focus on the executive role, rather than making every decision, which has a tendency to slow things down and create inefficiencies. More importantly, in terms of growth, it encourages people throughout the organization to become entrepreneurial, and take ownership of their decisions.”


Organizational leadership means leading people
The issues of budgets, technology, planning, and hierarchy are only part of the leadership equation for today’s health care executives. This is entirely new terrain for many of these people, but creating the right infrastructure and bringing in skilled personnel can help to quickly close gaps in the organization. The challenge then becomes one of team-building and managing the people working within this system: motivating them to pursue organizational goals, fostering inter-departmental cooperation, and managing different personalities and competing agendas. Call these the “soft skills” of health care leaders; some people may possess them innately, but others may have to develop them through training and education just as they would any other skill.

“These skills do not come naturally to many health care leaders, particularly those who excelled in the clinical setting and were then recruited into administrative posts,” said Shore. “The health care professionals on whom the organizational mission depends have their own prerogatives and standards, and these may be at odds with organizational needs. What those in leadership must understand is that in dealing with these professionals, persuasion and negotiation are much more effective than issuing commands. Ordering people around isn’t going to work.”


HMI in the health care management arena
A major component of HMI’s mission over its ten-year history has been helping health care organizations raise the standard for patient care by building and improving upon clinical care facilities. Much of this work is at the systems level: how to align planned facilities with actual regional need, how to take a long-term view of facilities and capital planning, and, once a facility is in place, how to institute team-based, patient-centered care that meets an international standard.

To create centers of excellence, the bricks-and-mortar piece of health care, as described above, must be paired with a focus on developing leadership. HMI has been working with a diversity of partners to develop health care management training programs to address this need.

In February, Shore co-directed a health care management course for the University of Cali in Santiago, Colombia. With the current landscape of Colombian health care as the starting point, the program brought together a multidisciplinary faculty to discuss issues such as quality management, innovation, demographic influence, and issues surrounding cost and payment. At a time when Central and South America are recovering from economic crisis, the focus on managing costs could not be more critical.

Margaret Regan, manager of HMI’s health systems division, says that there has been a surge of interest in leadership and business training among health care leaders in China, where the shift from government-operated health care to a more privatized system has uncovered a great need for new health care leaders. “Hua Shan Hospital (a Shanghai-based hospital network) has been working with HMI to develop its core leadership,” said Regan. “To date we have facilitated interactions between individual Hua Shan managers and experienced health care leaders here. These programs are hands-on, and cover concepts such as budgeting, human resources, and professional development.” Regan added that HMI hopes to further develop this area of training.