Some of the best ideas for improving health care come from outside our field. For example, we’ve adapted cockpit-style checklists from aviation to improve teamwork and communication on our clinical teams. We’ve turned to performance improvement methods from manufacturing to reduce waste and defects in care delivery.
A recent experience reminded of the value of seeking ideas and inspiration from elsewhere. As I wrote in an earlier post, I was among 15 executives from various fields who toured Cargill through a fellowship run by the Malcolm Baldrige National Quality Award Program. On a visit to Cargill Corn Milling, among the largest of the gigantic company’s 75 business units, I heard a story with unexpected parallels to health care. Cargill officials told us that their nine plants used to compete against each other. Often, two or more of their plants would submit bids to the same customer, usually with different prices. This self-competition was inefficient, didn’t meet customer needs, and cost them market share and revenue. Something needed to be done.
The Cargill leaders recognized that they needed to organize themselves around what they provide to customers (i.e. their product lines) rather than their geographically based plants. And that’s what they did. The three main product lines were human food products (largely sugar), animal feed, and fermentation such as ethanol. Rather than having each plant compete against each other, they worked together to meet customer needs.
To support this new structure, they set cascading goals in which everyone—from the employee to the plant to the product line—knew what they had to accomplish to meet corporate goals. They changed the incentive structure so that plant managers had greater motivation to ensure the company’s success, customer satisfaction, product line success and their plant’s efficiency. With this reorganization, they weren’t pitted against others at their own company.
As I listened to the presentation, my pulse quickened. I leaned forward anxiously feeling as if I took a double espresso to pull an all-night study session. The parallels between corn milling and health care were haunting.
Change plant to hospital and you have the same situation as the Cargill officials described. Hospitals that are part of the same corporate or nonprofit system compete with one another in such fields as neurosurgery, orthopedic surgery, cancer care and cardiac care. They usually have different prices, and their quality is largely assumed (based on reputation) rather than measured with empiric data. Customers—patients, employers, and insurers—scratch their heads, trying to figure out where to get their care. Their needs are not met.
Yet I do not know of a single health system that has made the transition to product line management. As Harvard University professor Clayton Christensen, who coined the term disruptive innovation, points out, health care is exceedingly inefficient because every hospital tries to do everything. Yet you would think that health systems with multiple hospitals would have an incentive to organize by product line. To date they have not. This isn’t easy, and efforts to improve efficiency must be balanced with access and quality of care.
Even when health systems have hospitals in close geographic proximity , they have not organized by product lines. At best, they may share an MRI machine. Yet in the future, more hospitals may be forced to economize. With the growing focus by insurers on paying for value rather than volume, on measuring outcomes rather than assuming them, hospitals will face increasing pressure to improve care. This requires an effective quality management infrastructure at multiple levels—health system, hospital or practice, department, and the unit or clinic. Such an infrastructure supports dedicated time for doctors and nurses to devote to quality improvement. It also provides these quality leaders with the skills to effect change and the accountability structures for delivering results. If individual hospitals try to create an infrastructure for the multitude of product lines that they offer, they will break the bank. Health systems will be forced to organize by product line, invest in quality infrastructure and monitor and improve performance.
It is time to put greater focus on meeting our customers’ needs. You cannot be good at something you do once or twice a year. Yet this is exactly what some hospitals attempt. In a post last week I shared the tragic story of a patient who was transferred to Johns Hopkins Hospital after a botched esophagectomy at a nearby hospital. The surgery went terribly wrong, leaving her with a large hole in her trachea, a lengthy ICU stay, and a poor prognosis. The cost of her care will be in the millions.
As it turns out, the hospital that performed her surgery did just one the prior year. This is despite evidence that hospitals performing fewer than 12 esophagectomies a year have substantially increased mortality. Two nearby hospitals had performed a combined 160 esophagectomies that year.
Even within the same health care system, surgeons and hospitals perform procedures they do infrequently. Hospitals compete for patients all the while underinvesting in a quality management infrastructure. More and more hospitals are merging and joining health systems. Yet the benefit of these mergers has to be more than financial—primarily negotiating better rates with insurers. It has to be serving our patients better. That will only happen when health systems start to organize by product lines that cut across their hospitals, invest in a quality management infrastructure, and monitor and improve performance.
Recommended reading: Review a comment by a New York surgical leader on some of the issues raised in this and other recent blogs.