Can Healthcare be Quick and Nimble?

NY Times author Adam Bryant’s book Quick and Nimble (2014) synthesizes interviews with more than 200 CEOs/business leaders.  Bryant has a great ear, and weaves the wisdom of diverse executives through common themes that are core to running a business.  The chapter called “A Simple Plan” resonates for me, as hospitals probably represent among the most complex organizations developed.  (Not to mention the whole healthcare system!)

Bryant argues that a shared system of common goals can breakthrough complexity.  Bryant quoted David Rock, the director of the Neuro Leadership Institute, who explained how shared goals create a sense of teamwork that fundamentally changes how people perceive their colleagues.  Says Rock:  “This is the neurobiology of trust.  If you can create shared goals among people, you can create quite a strong in-group quite quickly.” Bryant concludes: “A clear plan that creates shared goals will get everyone moving in the same direction and foster a sense of teamwork so the company can execute its plan quickly.”

Robert Coates, MD, the vice president for medical affairs at Hunterdon Medical Center in Flemington, NJ, demonstrated these principles in his article “The New Jersey Gainsharing Experience”  (Coates, 2014).   Coates shows how gainsharing works by aligning physician and hospital goals, and how this alignment is a catalyst for execution on a clear plan.

The size of the physician incentive is tied to the size of the cost reduction, but incentive payments are also linked to quality measures.  Coates believes that it is a reasonable assumption that the incentives “got the attention of the physicians” at least to think about the cost of care.  The program integrates other initiatives, including teams assembled to look at lower costs across the institution from front line workers to management.

Coates documents how Hunterdon saved $877 per admission in the first six months of the program, and steadily increased the savings to $2,301 per admission, or about 20% per admission, in the last half year of data.  The incentives paid to physicians are a fraction of the cost reduction (between 7% and 10% over each half-year).   Coates reports no negative impact on quality.

By sharing work goals and plans, and creating common incentives, the medical staff is aligned with the hospital.  Silos are destroyed as a new team is created. The results at Hunterdon seem to speak for themselves…by aligning incentives, Hunterdon Medical Center and their medical staff are leading the way to show how to cut costs while providing quality health care by aligning incentives and executing on a clear plan.  Maybe Coates should be in Bryant’s next book!

References

Bryant, A. (2014). Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation. New York, NY: Times Books. Coates, R. G. (2014, January-February). The New Jersey Gainsharing Experience. Physician Executive Journal, 46-51.