Outline Health Care Reform and Environment Changing Culture for - - PDF document

Changing Culture for Success in a White- Water Environment: Leading and Managing Change

Presented by John F. Tiscornia, MBA, CPA Estes Park Institute Senior Fellow Health Financial Planning & Governance

Outline

– Health Care Reform and Environment – Transforming Your Organization – Readiness for Change – Strengthening the Culture – What to do?

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Insurance

The Healthcare Reform legislation and private sector trends will have a profound effect on healthcare providers:

– Immediate reductions in reimbursement to hospitals and physicians – Focus on purchase for value – not volume!

• Outcomes and quality
• Bundled payments
• ACO

– Transition from volume-driven fee-for-service to value-based. – Financial penalties for poor quality outcomes – Private sector moving independently to control rising cost of healthcare – Measurement of Quality and Transparency

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The Healthcare Reform legislation and private sector trends will have a profound effect on healthcare providers:

– Don Berwick, head of CMS says:

• Better patient care
• Better health care
• Lower costs

– Prevalence of mergers, acquisitions and affiliations

• Swedish Health Services and Providence Health and Services
• Southwest Washington Medical Center and PeaceHealth
• Jewish-St. Mary’s and University of Louisville
• West Penn Allegheny and United (Insurance)

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What will it take to navigate the white water?

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Fee for Service Business Model Global Payments Risk Model Revenue & Income Sources Hospital Diagnostics Expense Centers Hospitals Diagnostics Incentive Structure Transition

Business Model Transition

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Leading the Transition

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Curve 1

– All about volume – Reinforces silos – Little incentive for real integration

Curve 2

– Shared saving program – Bundled payments – Value-based reimbursement – Rewards integration, quality, outcomes, and efficiency

Curve 1 Curve 1 Curve 2 Curve 2 Natural Trajectory Natural Trajectory

Performance Performance Time Time

Curve 1 Curve 2 Natural Trajectory

Performance Time

Leadership – board, management and clinical leaders– need to make their organization more ‘change-ready’ and be able to develop a culture of accountability for performance.

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Eight Steps to Transforming Your Organization

• 1. Establishing a Sense of Urgency
• 2. Forming a Powerful Guiding Coalition
• 3. Creating a Vision
• 4. Communicating the Vision

Source: John P. Kotter; Harvard Business Review, March-April 1995

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Eight Steps to Transforming Your Organization

• 5. Empowering People in the Organization to Act
• n the Vision
• 6. Planning for and Creating Short-Term Wins
• 7. Consolidating Improvements and Producing Still

More Change

• 8. Institutionalizing New Approaches and a New

Culture

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Assessing the Organization’s Readiness for Change

• 1. Is the change effort being sponsored by senior-level

executives?

• 2. Are all levels of management committed to the change?
• 3. Does the organization culture encourage risk taking?
• 4. Does the organization culture encourage and reward

continuous improvement?

• 5. Has senior management clearly articulated the need for

change?

• 6. Has senior management presented a clear vision of a

positive future?

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Assessing the Organization’s Readiness for Change

• 7. Does the organization use specific measures to assess

business performance?

• 8. Does the change effort support other major activities

going on in the organization?

• 9. Has the organization benchmarked itself against world-

class companies?

• 10. Do all employees understand the customers’ needs?
• 11. Does the organization reward individuals and/or teams for

being innovative and for looking for root causes of

• rganizational problems?

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Assessing the Organization’s Readiness for Change

• 12. Is the organization flexible and cooperative?
• 13. Does management effectively communicate with all levels
• f the organization?
• 14. Has the organization successfully implemented other

change programs?

• 15. Do employees take personal responsibility for their

behavior?

• 16. Does the organization make decisions quickly?

SOURCE: Based on the discussion contained in T.A. Stewart, “Rate Your Readiness to Change, “Fortune, February 7, 1994, pp. 106-10

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Change Dependent Upon Culture

– Underlying qualities that make an organization ready and able to change is a change in culture. – The change is one from a culture of entitlement to

• ne of accountability.

– To be successful, a change to a strong culture is necessary at all levels within the organization: Board, Physicians, Clinicians, Management and staff.

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What do we mean by “culture”?

– Organizational culture drives actions, beliefs and values that guide the behavior of its people and the way it conducts its business – It is the personality of an organization – It defines the “way we do things around here” – It is the shared practices, behaviors and beliefs of the

• rganization

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How do you change/strengthen culture?

– Communicate and discuss culture, mission, values, vision

• What do you want the organization to be like?
• How do you want people to act in the organization?

– Create a felt need for the new way of doing things, a sense of urgency, make a case – Translate the culture into specifics, e.g., expected behaviors, norms. – Model the culture and desired behavior; recognize others who do. – Create incentives that promote the culture

• Performance appraisals
• Incentive compensation
• Who gets recognized and rewarded

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How do you change/strengthen culture?

– Measure the culture

• Staff surveys
• Patient feedback
• Internal audits

– Recruit people who fit the culture – Training and development for leadership: boards, management, clinicians and staff – Celebrate the examples and successes – Orientation, socialization – Reorganize

• Clinical/service line vs. functional structures
• Cross-functional communication and teams

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How do you change/strengthen culture?

– Simple core theme

• “Our patients come first”

– Leadership; Time; Persistence – Logo; symbols; visual representations – Job enrichment; job rotation – Put the organization in a position to be held accountable

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CHANGE IS COMING! WILL YOU BE READY???

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