Health Care Management

Careers in Health Care

Health care is currently 16% of the U.S.’s gross domestic product and growing rapidly. An economic in-joke is that it will soon be 100% of GDP. In truth the sector is expanding and talent is in demand.

Our recent workshop on careers in health care introduced the following assumptions:

1. The need for information technology professionals is critical in the health care industry. Electronic medical records are beginning to reshape the industry. Also, operational process technologies are greatly needed to enhance efficiencies (Terry Pladson, CEO of CentraCare Health Systems).
2. Estimates show that 40-50% of current health care CEOs will be retiring in the next ten years and new leaders must be developed to take over. These leaders must understand contemporary society and manage from the bottom up as well as the top down (Margaret Perryman, CEO Gillette Children’s Specialty Healthcare).
3. Future health care leaders must be able to take risks and be able to execute new ideas. Health care is a factor and we need to manage it effectively (Mark Fisher, CEO Aspen Medical Group).
4. Health care professionals work in perpetual whitewater with new challenges arising every day. They must be ready to solve both clinical and managerial problems as they come up every day (Janelle Strom, MD, Brainerd Lakes Integrated Health Services).
5. Up and coming leaders in health care need to have mentors to guide them through the tough learning processes connected to managing in the health care world. Learning never stops and one has be equipped to continuously find new ways to be creative. Help in doing so in necessary and there are a lot of experienced managers will to help (Denis McCarren, Program Manager – Spine, Health Partners/Regions Hospital).
6. The MBA is the new BA. Health care leaders have to have the education to understand the challenges of the industry. An MBA is the best professional degree through which to gain the right tools to cope with change and right tools to open doors for advancement (Deb Franko, Medical Rep, Roche Laboratories).
7. Managers have to be bi-lingual in the clinical and management languages prominent in today’s health care environment. There is an operational gap between the business side and provider side of health care. Bridging that gap is important for better serving patients (Paul Hansen, RN, Manager of Interventional Cardiology, Regions Hospital).
8. Health care leaders should take the opportunity to learn what other industries are doing to solve problems and grow. Isolation within health care has been the case in the past but has not been productive. Other industries provide a wealth of information for health care professionals to draw upon. (Les Stern, Group Director, Cancer Care, HealthEast).

It was clear from the comments of the workshop participants that, in hiring, health care firms look for character, flexibility, leadership, customer empathy, risk taking, and change management skills. These skills are found in MBA training. Panelists confirmed that an MBA is the degree of choice for those who wish to advance in the industry. Most importantly, the process of completing an MBA is a signal to the health care business world that a person is ready to assume a leadership role at the highest levels of the organization.

Posted by Jack Militello at 02:30 PM | Permalink | Comments (0)

In preparation for a workshop on board effectiveness in health care, we interviewed fourteen health care executives from the Upper Mid-West region, asking them to define their primary concerns about the effectiveness of their boards and the challenges they see in developing effective boards in the future.

A number of themes have emerged from the interviews. I would like to touch on three of them.

The first is the boundary between governance and management. Those interviewed made comments such as: “it is important to highlight the distinction between board governance and management”; “boards tend to be more engaged operationally when they are not comfortable that management is aware of or addressing the important issues”; “in the past we have given the board too much financial data which invited too much involvement”. These and other similar comments question the proper role of the board in management issues. David A. Nadler (Harvard Business Review, May 2004) urges that boards decide how engaged they want to be in influencing management’s decision and the organization’s direction. He offers a continuum of board involvement ranging from passivity to operational control. He states that selecting a level of engagement provides the philosophical framework for everything that follows. The true message is to decide and agree upon a level of engagement rather than letting it emerge in an ad hoc fashion when it can only lead to tensions in the future.

The second theme is the board’s intellectual contribution. Respondents are concerned with how board members who are not from the health care professions communication their expertise to the provider community. Comments included the following: “sometimes the board gives us simplistic solutions to complex problems”; "business experience can be a weakness if they want to bring their ‘model’ and it doesn’t fit”; “local boards have a lot of people that aren’t very familiar with health care and it is a challenge to get them up to speed on the language of the industry”. It should be noted that board members from other professions can usually bring to the table only generic knowledge of business principles. Many physician and administrative board members can bring a richer knowledge of the complexities of the health care industry. A few older-timers or astute observers of life within a particular health care setting can comment of what is organizational unique to that setting. For me, the intellectually complete board would consist of a blend of business generic, industry specific, and organizationally unique insights and know-how. Selecting the right people with the appropriate know-how can add significantly to the effectiveness of a board.

The third theme is board evaluation. Comments included: “it never hurts to remind the board what their responsibilities are and where they draw the line; “one of our challenges is to evaluate board effectiveness and hold the board accountable for effectiveness”; “sense of personal accountability has increased as the board continues to get larger”. The National Association of Corporate Directors (NACD) released Board Evaluation: Improving Director Effectiveness in 2006. This comprehensive study stresses that strategic goals are the basis against which any board evaluations would take shape. The NACD model is systemic and addresses people, culture, issues, information, processes, and follow-through. The study offers a number of feedback tools to assist boards in the self-assessment process. NACD believes that board assessment is cirticial to board effectiveness.

Board effective can be driven by a number of factors but paying attention to the three themes mentioned above can significantly help a board function at an optimum level.

Posted by Jack Militello at 12:57 PM | Permalink | Comments (0)

Board participation and management is a growing concern in health care. The IHI has recently published a how-to guide on governance leadership (www.ihi.org/IHI/Programs/Campaign).

This study states that:

Outmoded views of hospital governance sometimes suggest that hospital boards are responsible only – or primarily – for the organization’s financial health and reputation… But the board’s duties do not end with financial stewardship. Boards oversee mission, strategy, executive leadership, quality, and safety on behalf of the owner – whether the hospital is community owned investor owned.

The expansion of board responsibility in health care expands beyond hospitals into all stakeholders organizations within the health care systems. As the responsibilities of boards expand, board members are looking for ways to be more effective in their roles. In turn, managers are looking for ways to relate better to the requests of boards.

I currently serve on four corporate boards (none in health care) and have consulted over the years with numerous boards from both the for-profits and nonprofit sectors. Board members have little training and are confronted with issues of they had never thought of when they accepted their positions. Managing the boundaries of the board is a key issue. By boundaries I mean, the level of involvement board members should have within the organization. Sometimes board members are confused as to whether they are managers and/or consultants, as well as board members. Likewise, organizations are confused as to what role they expect boards to take.

David A. Nadler in the Harvard Business Review, May 2004, does a good job of addressing the issue of boundaries. His taxonomy of board boundaries ranges from passive participation through to operating the organization. Board members and their organizations should be clear in defining the desired level of involvement required. In my experience, not doing so is one of the biggest and most common hindrances to board effectiveness. Board members are most effective when they know the extent of their roles.

Posted by Jack Militello at 01:57 PM | Permalink | Comments (0)

There are a variety of innovative strategies in health care that are struggling to survive with this well bounded system.

The health care public policy debate seems to be trumping the need for strategies on the operating levels of the health care system. The New York Times (Sunday, September 23, 2007) points out that the Republican candidates have not grappled with the health care issues, relying on tax deductions to increase insurance coverage and not much else. Voters who put a higher priority on reshaping the health care system along free market lines than on achieving universal coverage will prefer the Republican plans. The Democratic candidates would move toward universal coverage and would use mandates to do so. Voters who put a high priority on covering all or most of the uninsured will prefer the Democrats’ approach.

The Times points out that both parties are missing the policies that restrain costs and add to more effective treatment. Standard solutions, such as electronic medical records, restraining malpractice expenses, and competition among health plans are as readily discussed within the industry and many are in play. But the Times is asking for more. It is asking for efforts that challenge the existing system in favor of more drastic reforms.

"No top candidate is either party has broached more drastic remedies, like limiting the use of expensive new technologies, cutting reimbursements to doctors and hospitals, or forcing people to use health maintenance organizations. And no one has suggested imposing higher taxes on everyone, not just the wealthy, to finance universal coverage. These solutions are not even discussed on the campaign trail lest they alienate voters and interest groups."

These disruptive innovations are very controversial and would be difficult to institute through public policy reform. Yet, they are issues that have to be resolved on the public policy level. Other innovations might be tested in some way through the strategies of individual organizations. This is not an easy endeavor but would be worth while to undertake.

HSAs, retail clinics, physician owned hospitals, Web MD, patient-maintained medical records, spiritual healing programs, focused health care centers, application of manufacturing principles to health care management are disruptive technologies that could work to reform health care. Many are already making strong headway within the system. However, the health care system is dynamically conservative and will fight these innovations bitterly if they are truly disruptive. Change on the margins may be welcomed but radical change will not be. It is the entrepreneurial leaders of these movements that are going to make the true difference in health care reform, not political candidates or executives within leading health care institutions.

Posted by Jack Militello at 04:37 PM | Permalink | Comments (0)

At yesterday's meeting of The Colloborative in Minneapolis, the panel introduced a set of disruptive technologies that might be very helpful in improving America's health care sysrtem. The technologies represented by the panel were not new and included: joint insurer/provider systems; HSAs; venture funds to support new ideas in health care management; and the commerical health care clinic.

What made the panel most interesting for me were the assumptions that are behind these technologies:

1. Heatlh care is a business and the business aspects of health care are as noble in intent as the service aspects.
2. The health care system is constrained by the federal funding policies that are directed by Medicare. This is our money. As a free-market democracy we vote authority to our legistiators to management our money in a way that supports the common good. If we are unhappy with how that is going, we can insititute change through the electorial process. The country had done so in 1968 over foreign policy and in 1980 over domestic policy. Also, we may be doing it again in 2008 over foreign and domestic policies.
3. We need to manage health care for the common good and, while being supportive of groups at the margins of society, we should not ignore or mis-define the common good.
4. Disruptive technologies may be necessary to focus the health care system more directly on the common good.
5. Clear information must be provided to consumers of care and they should be trusted in their interpretation of that information so we can better evaluate disruptive technologies.

Jack

Posted by Jack Militello at 09:14 AM | Permalink | Comments (0)

I would like to open a general discussion about allowing choice within a seemingly constrained health care system. Without choice, there are no markets. Without markets, there are no strategies. Without strategies, there is no gain.

The health insurance industry can be expected to become more retail oriented. A March 2007 McKinsey Quarterly article by Tom Latkovic and Shubham Singhal states that individuals currently bear 25% of the cost of the $1.9 trillion a year spent on health care. The more than 6 million people who have moved to consmer-directed health plans, such as high-deductable policies associated with HSAs, have attracted atteention. Many other consumers make decisions about health care purchased. The authors list:

19 million people with individual insurance,
Employees who can choose among productes from a number of carriers through their employers,
Spouses who have options from different employers,
Retired people with Medicare options,
the 46 million uninsured who purchase health care with their own money.
The authors continue in pointing out that 40 to 45 percent of people in the United States already choose their primary health insurance form a variety of possible carriers.

Jack

Posted by Jack Militello at 10:49 AM | Permalink | Comments (1)

Introduction to Week 1
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Posted by Jim Rafferty at 02:42 PM | Permalink | Comments (0)