Structural Transformation Should Always be a Priority

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As healthcare executives and leaders, your cup is overflowing with concerns and issues that all demand an immediate answer and solution from the C-suite. With PPACA rules and regulations dominating your time, not to mention questions of consolidation if you’re a smaller (or even larger) organization, one pertinent and vitally important topic may get crowded out–structural transformation.

Philip Betbeze over at HealthLeaders Media addressed this topic in a recent article. He warned leaders that “…you can’t rest on working to get waste out of the system. It’s a necessary precursor to being able to deliver on value. Excess costs are your enemy, and they’re insidious, because they’re not as visible as, for instance, a ratcheting down of reimbursement rates, or the potential combination of a local competitor with a deep-pocketed bigger system.”

He charges that CEOs need to be activists against waste and inefficiency in their system.

So how do you affect change in this area? Betbeze offers the example of Ron Paulus, MD, chief executive officer of Mission Health in Asheville, N.C., whose young tenure at the organization has been distinguished by a laser-like focus on structural transformation.

Paulus advises that organizations start with the frontline staff, noting that this could include some of your lowest-paid employees.

Betbeze writes about Paulus, “He employs a dedicated team of facilitators to help frontline staff on their value-stream mapping—a lean-manufacturing technique used to analyze and design the flow of materials and information required to, in this case, provide a variety of healthcare services.”

This approach accounts for the “entire encounter” that a patient has with the health system and queries both patients and caregivers “about the value of certain tasks.” Paulus believes that “shadowing patient and caregiver experiences in such a painstaking manner is necessary for effective re-engineering.”

Paulus has particularly focused the attention of his quality team on the ER and OR and believes that the comprehensiveness of their studies are necessary “to orient the system toward a future in which only value will be rewarded.”

With goalposts leaning toward expansion, Paulus believes that the organization will have a clearer eye as to what that expansion should be thanks to his team’s intensive studies.

He stated, “…this is to try to maximize the efficiency and to provide learning insight into what the building should look like once we have the ability to do the optimal design.”

Critics of these re-engineering-engagement methods charge that cost reduction only occurs if you have a goal, a cost target that you’re seeking to reach, around which you develop a plan that will also reduce fixed costs, not just marginal costs.

So, what do you think of Paulus’ methods? Is structural transformation as much of a priority for your organization as it should be? Should it be a high priority? What are some of the initiatives that you have implemented to confront waste and inefficiency in your system?

-by Pete Fernbaugh

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