Breath Life Into Your Mission Statement

Who am I? Why am I here?

Oh the questions of human existence. They should also be the questions of your hospital's existence. Mission statements can be for the organization as a whole, but also for each part of the organization that feeds into the larger mission. Whether your mission is for the organization or for the med/surg first floor, your mission should have the same characteristics:

Missions should be broad in scope but specific in action
You don't want your mission statement to put your organization in a box. "We will treat elderly women who have breast cancer." That may be a great mission for a department, but it doesn't allow innovation and creativity in the services your organization offers.

Mission statements aren't meant to change with the newest fad
Mission statements are meant to last the test of time. Your mission statement in the 90's may have been to develop an organization to meet the needs of managed care. However, we have seen managed care decline dramatically, and that would not be an appropriate mission for today.

Your mission statement should specifically identify the market that you serve
This is the who, what, when, and where of your statement. Some hospitals may serve a town, some may serve at state, and some may serve a special group (think the VA).

Your mission statement should convey the special qualities of your organization
This is about how your differentiate yourself in the marketplace. It helps you to distinguish your hospital from the one in the town 10 miles away. As we talked about in earlier posts, service quality can be a great way to differentiate yourself from your competitor.

Connecting

Hospitals used to be much like universities, where executives would get together to help one another through the sharing of ideas, experiences, and best practices. Unfortunately, the hospital industry has become competitive and ideas have ceased to flow throughout the community.

The Hospital Finance Society is going to change that. We will use the knowledge that we have accumulated from the experience of our members to help you manage your hospital's finances. With exclusive benchmarking, case studies, and our exclusive CFO network, we will connect your hospital to success like never before. If you would like to become a member, join now.

We Need More IT!

Business men (and women) love to solve problems. There is a solution for every ailment in America's medical record. It's very popular in the for-profit business community to shout for business solutions to America's health care problems. One of the more popular suggestions, as you'll find in today's WSJ, is a call for greater utilization of information technology.

There have been other industries that have been slow to integrate information technology and all the great possibilities it entails, but no industry has been more resistant than health care. We complain about quality of care problems, integration of data issues, and any other excuse to combat the barrage of IT ideas.

Well here is the ultimate excuse that will quiet the argument of any MBA out there. There isn't enough money for it! No other industry in the world has margins that are controlled by the government as much as healthcare. For example, here in Maryland hospitals were able to increase their rates for a few years to help them to recapitalize. Only one thing went wrong, government regulators looked at the profit increases and decided that hospital profits were too large. This left many hospitals with huge debt loads and a lack of cash flow to fund them.

Give that one a try with your local MBA.

Scared of the Regulatory Storm

I was at an educational event last week and one of the presenters spoke about the major regulatory changes that are going to be coming to hospitals in the near future. The major changes that are coming are:

RAC audits
IRS form 990
HIPPA

After the presentation (which was very good I might add), the general emotion of the CFO's around my table was fear. I guess it was fear about how difficult their job was going to be, or maybe fear about the financial performance of their institution.

Many of these regulatory changes are meant to improve your hospital. Use the opportunity of the RAC audits to review your charging practices. While the RAC auditors will be looking for overpayments, there are just as likely to be procedures you didn't charge for. Form 990 changes give you an opportunity to review how you serve your community. How can you improve the hospital's perception in the community?

There's nothing to fear but fear itself. If you let the fear of these changes take over, you could miss the opportunity to improve the operations of your hospital.

Thinking Long Term

I was in a meeting yesterday discussing the intricacies of hospital rate regulation. In Maryland we have a rate comparison tool called the Reasonableness of Charges calculation. This tool measures hospitals charges and identifies high cost hospitals. The discussion centered around how we bring costs at high cost hospitals down to the state or peer group average.

There are two proposals out there. One, is to use arbitrary fixed percentages above or below the peer group and rearrange money from there. Second, is to use the standard deviation of the hospital charges and identify hospitals as a percentage of that standard deviation.

As we were discussing this, I thought to myself.  Using a standard deviation is great because there is a mathematical basis for it and therefore it is more reasonable and fair.  However, I began to think, using a standard deviation means that there will always be hospitals that are identified as high cost no matter how spread out the data is.  This wasn't going to happen the first year, but 5 years down the road this is a strong possibility.  

When people are making policy decisions, it's really difficult for them to think years down the road.  Whether they are talking about hospital rates or they are talking about a $700 billion bank bailout.  Sometimes what seems like a good option now, can ultimately fall back and hit you in the face.

The Battle for CFOs

It seems the only way for people to move up the career ladder in the hospital industry is to move from hospital to hospital. It is said that the average CFO tenure is approximately 3 years.

McKinsey released a report nearly 10 years ago stating, "the most important corporate resource over the next 20 years will be talent: smart, sophisticated businesspeople who are technologically literate, globally astute, and operationally agile. And even as the demand for talent goes up, the supply of it will be going down."

From the standpoint of risk identification and mitigation, this has to be on the top of every board's radar. People take time to gain the necessary experience to identify risks that the hospital is facing. However, if CFO's are turning over every three years there is no time to become familiar with the risks of the hospital. In coming posts we will explore strategies to keep the institutional knowledge in your hospital for a long time.

Assorted Links

1. Outsourcing ER dispatchers

2. Health Policy Blogging is being tracked by Kaiser

3. Washington still can't make sense of healthcare IT

Waste

Interesting article in the Health Affairs Blog.

Putting the I in IT

Information technology is the thorn in every hospital managers side. Hospitals spend enormous amounts of capital providing physicians with the latest technology to diagnose and treat patients. IT initiatives need to be evaluated by hospital management to make sure they align with the organizations overall goals and objectives.

Questions you should be asking about your IT strategy are:

- Is the IT infrastructure able to meet business needs?
- How is IT performance measured?
- How are IT investment decisions proposed, shared, and delivered?
- How is IT performance accountability divided between the organization and IT department?
- Does IT staff need to understand strategic business goals and objectives?
- Do employees recognize, define, and communicate IT needs effectively?

By answering these questions and then working with your CIO, your organization will be able to identify the most relevant business areas.

Your Good-Paying Customers....for Now

We've talked previously about your hospital's customers here.

I think a lot about who our customers are at hospitals. Are they the patients, the doctors, or the third-party payers? It's probably a little bit of all of them. Tonight let us consider the scenario of the third-party payers as our customers.

What does this customer want? I believe the only thing that matters to this customer is what kind of return on investment are they getting from your hospital. In other words, how much cost must be incurred to provide a positive outcome for their customers, the patients. The third-party payers, along with much of the public, agree. Hospital care costs too much.

How do we know this? I think the Balanced Budget Act of 1997 is a good example of this. Would the American public approve of hospitals receiving less reimbursement for their care if they believed they were getting a good return on their investment? I don't think so.

3 Questions You Must Ask About Your Managers

"When you have able managers of high character running businesses about which they are passionate, you can have a dozen or more reporting to you and still have time for an afternoon nap." - Warren Buffett

Berkshire Hathaway is a holding company of about 10-15 businesses. Your hospital probably consists of about 5-10 different departments. You should manage your departments in a similar manner to the way Buffett manages his businesses. This means doing little of it. The key to effective operation is to evaluate your departments in this manner:

Is the department management rational?
Is management candid with their stakeholders?
Does management resist the institutional imperative?

These questions drive an important point in the evaluation of managers of your departments. You must have managers that you can trust and that have a passion for delivering service to the public.

Marry Your Community

When was the last time you made your patient's hearts flutter? Woo your community by following these steps.

Beautify yourself - The relationship starts on a physical level. Your hospital must appeal visually. No one does business in an establishment with dirty floors or bugs in the room (believe me, I know).

Begin a conversation - Love develops when two people know each other. They talk about their future. Tell your community what will do for them. Be open and honest about your strengths and limitations and never ever lie.

Become a shoulder to lean on - It's the difficult days when you learn how much you love someone. Hospitals have good days and they have bad. Celebrate during the good, and show empathy when needed.

Make the commitment - You've bared your soul to the community, now prove your commitment. In sickness and in health, regardless of profit or loss, the hospital will be there and your core qualities will always stay the same.

Strong relationships help you to know what your patients need and how you can provide for them. By making this commitment, your hospital will build a deep, long-lasting relationship with the community. This will not only be good for the bottom line, but the health of your patients.

Coloring Between the Lines

Children love coloring. Half the joy comes because when you are a child you can scribble how ever you like. Purple tigers and a green sky are beautiful and it doesn't matter if you make it between the lines.

Then people tell you that tigers aren't purple. You ask yourself why and no one can really give you a good answer. Your creativity starts to wither and die and you begin to perform based on what people tell you is correct.

The health care industry has for so long been doing everything between the lines and never asking why it must be that way.

Word of Mouth

Thank you to all of my readers. If you find that you enjoy the topics in this blog, please let your peers know. I am a big believer in the good work of word of mouth.

If you have any feedback for me please email me at the bottom of the page, or here.

Revamping Your Hospital's Mission Statement

Who am I? Why am I here?

Oh the questions of human existence. They should also be the questions of your hospital's existence. Mission statements can be for the organization as a whole, but also for each part of the organization that feeds into the larger mission. Whether your mission is for the organization or for the med/surg first floor, your mission should have the same characteristics:

1. Missions should be broad in scope but specific in action - You don't want your mission statement to put your organization in a box. "We will treat elderly women who have breast cancer." That may be a great mission for a department, but it doesn't allow innovation and creativity in the services your organization offers.

2. Mission statements aren't meant to change with the newest fad - Mission statements are meant to last the test of time. Your mission statement in the 90's may have been to develop an organization to meet the needs of managed care. However, we have seen managed care decline dramatically, and that would not be an appropriate mission for today.

3. Your mission statement should specifically identify the market that you serve - This is the who, what, when, and where of your statement. Some hospitals may serve a town, some may serve at state, and some may serve a special group (think the VA).

4. Your mission statement should convey the special qualities of your organization - This is about how your differentiate yourself in the marketplace. It helps you to distinguish your hospital from the one in the town 10 miles away. As we talked about in earlier posts, service quality can be a great way to differentiate yourself from your competitor.

Customer Focus

I don't think I have ever heard the work "customer" uttered at a hospital, in my classes at the Bloomberg School of Public Health, or in any publication. Many of the problems that health care industry finds itself in can be attributed to a lack of consumer focus.

A hospital administrator must start reading publications that help them to have a customer focus. Some of the good ones include:

The Church of the Customer Blog
Seth Godin's Blog

The customer focus world is coming. Medicare has begun to get involved and it's only a matter of time before someone finds a way of disseminating this information to the public.

Examples of Quality Through Strategy

There are three great examples of hospitals and clinics that have differentiated themselves on the quality of their services.

The Johns Hopkins Hospital
The Cleveland Clinic
The Mayo Clinic

If you read the mission statements of each of these hospitals, the common theme of all of them is patient care comes first. By focusing on the quality of the patient experience, these hospitals will never have to worry about having patients in their hospital. Patients will seek them out and the bottom line of the institution will be better for it.

Strategy to Quality

The next installment of this series will address the strategic aspects of achieving quality. Strategy can be defined as the path an organization takes from how they are today to how they would like to be in the future. Some call that future the vision of the organization. In this case the vision of the future has to be to run a hospital that cures everyone of their sickness and never makes a mistake. Sounds easy enough...

As an organization we can conceptually see where we want to be. We want to be free of errors that can be prevented. But before we can attempt to devise a strategy to get there we must do two things. We must do an analysis of the external environment that may be contributing to quality problems, but we must also to an internal environment analysis to see where we currently are.

You may have heard the phrase, "what you can measure, you can manage." Focusing internally on the organization would be the first step I would take. Start to find ways to improve the detection and reporting errors. Begin to establish a culture that sees errors as a way to improve and not a fear of reprimand. When you begin to understand the situation you are in, then we can begin to devise a strategy to remedy it.

Quality and Leadership

As we explore the concept of quality at your hospitals we will further dissect the role of leadership in improving quality.

In order to instill quality at our hospitals there are four ways of thinking that we must change to.

1. Quality is not a mistake, it can be measured and it can be managed - In medicine, many people say that outcomes are too unpredictable and therefore there is no way that one can manage and improve it. This is not a mentality of quality leadership. While there may not be a way of measuring something presently, a quality organization will find a to start measuring something and continually tweak it until it is a good measurement.

2. We ultimately serve our patients - Hospitals get very confused as to who their customers are as a business. Are the customers the physicians, the patients, or the community? The patients are the reason for a hospital to be. Improve the quality by focusing on the patient experience and the physicians and community will fall in line.

3. Go long - In order to improve quality in your organization, you have to take a long term approach. If quality is thought in a short term, it will not be accepted by your stakeholders. Changes in quality are expensive and inconvient. Thinking long term puts this in perspective.

4. Tap your inner creativity - Health care workers are not especially known for their creativity, but they may be the most creative and abstract thinkers in the world. Use that creativity to try solutions that you may not think will work. Give your employees the ability to try things and fail. Failure and learning from the failure is what give the world some of its greatest innovations.

Life Without Medicare - Patients

Despite all the consequences of losing Medicare on hospitals and physicians, the most dramatic impact would be on the patients. Medicare was put into place because the over 65 population was a group of people that nobody wanted to pay to care for. Lawmakers then believed that the healthy population could pay for the elderly population in a cost shifting principle.

The only way Medicare could go away is for people to save for the medical care much like they do for their retirement. The common belief is that everyone can put their money in a tax-deffered account and then use it when they turn 65. This idea is ok, but the problem then becomes how do you save money for people who have none. Then, what do you do with the people who did not save their entire lives and then cannot afford care.

None of this will work.

The only idea that I would have is to begin to take the human element out of health care and reduce the marginal cost of care. This includes greater use of computers, machinery, and robotics that can outperform humans. While this may sound like science-fiction, the government needs to defer money from some of their Medicare programs and incentive research in these areas.

What's Your Best Quality?

Hospitals and the public often think about quality in hospitals in the context of safety. This is absolutely a very important aspect of quality, but I want to delve deeper into quality. When was the last time your hospital looked at total organizational quality?

Many hospitals have heard of the Malcolm Baldrige award for quality. In fact, last year two health care organizations won this award.

Mercy Health System
Sharp Healthcare

There are six criteria that Baldrige award nominies are judged on including:

1. Leadership`
2. Strategic Planning
3. Customer & Market Focus
4. Measurement & Analysis
5. Workforce Focus
6. Process Management

We will explore each of these criteria in the coming weeks hoping to find something that you can institute at your hospital to improve your organizational quality. Please leave comments about anything that you may do at your hospital to address these criteria.

Finding Direction: The New Mission

As many of you know this is a very "green" blog that I started about six months ago. Up until this time, we have been drifting along without a direction.

That now all changes...At the Prognosis we have the goal of becoming the publication that every health care management professional reads to help them improve their hospital.

We want you to come here when you are looking for ideas to improve your facility. We want you to come here and share new and innovative ideas that you have discovered at your facility that we can share with the community. We want you to come here when you are looking for mental stimulation and keep you energized in your career.

We hope you enjoy this publication and we welcome any and all feedback.

Life Without Medicare - Physicians

Physicians much like hospitals would be greatly effected by any dissolving of the Medicare system. I could be wrong, but I believe that physicians were a major driver of the implementation of Medicare in the first place.

I believe getting rid of Medicare would put physicians at the mercy of for-profit insurance companies and consumers. Each would have a different effect on how physicians practice medicine. For-profit insurers are getting less tolerant of the autonomy of physicians. There would be less creativity in the practice of medicine and more "by the book" medicine.

Consumers would also have an effect on the way physicians practice. Consumers can be very loyal to physicians that they have had for many years, but that exists mainly for primary care physicians. Specialists however would have a more difficult time because they are less likely to have great customer service. Without the guarantee of payments from Medicare, physicians would find themselves in a less competitive position.

The prospect of the loss of Medicare would have a very dramatic effect on the way that physicians practice medicine and changing the way physicians practice medicine would ripple throughout the health care system.

Life Without Medicare - Hospitals

Take any business whether it be for profit or tax-exempt and tell them that they are going to lose half of their revenues and they are done. That's what would happen at many acute care hospitals if Medicare were to disappear.

The first thing that would happen is that hundereds of hospitals would likely close. This would take much of the excess capacity out of the system. Hospitals would then be faced with a population that would have to turn to the private sector for insurance.

Unfortunately, insurance companies are not going to be keen to pay for a population that is very likely to have a return on their investment. Therefore, the population is likely to pay for their own care.

In this circumstance hospitals are going to have to have the service of a hospital and the precision of an airline. Hospitals would have to being to provide real value to their patients. That means the feeling of wellness whether real or perceived must be provided to patients to the level of what hospitals are asking to be paid.

Come back for more on the effect of the dissolution of Medicare on hospitals.

Life Without Medicare

In an earlier post, I wondered out loud...what would happen to the American health care system if Medicare were to suddenly and completely cease to exist? Over the next few posts I would like to explore the effect of this from several different perspectives including; hospitals,physicians, health insurers, and the community. I would appreciate any feedback or ideas on what you think of this.

The HFMA Wrapup

The HFMA event was a sucess with the largest attendance of all time. The theme of the day seemed to be fear. There is much uncertainty in the hospital industry because no one knows what will happen with Medicare in the next few years. In addition the seizing of the credit market are going to make it difficult to fund capital. However we must not forget that after every downturn comes an upturn and we will figure out how to get through this.

Reform in Maryland

The first presentation today was from HSCRC executive director Robert Murray. Mr. Murray spoke very excitedly about the opportunity to improve access to health care in Maryland. Access to care is one of the great hallmarks of the Maryland system.

Live from the HSCRC workshop

Today I will be reporting from the HFMA's HSCRC workshop. I will attempt to comment on many of the presentations regarding the latest in payment methodology.

No Medicare

What would happen if Medicare went away tomorrow? Obviously there would be chaos initially but after that how would the delivery of care change? Would hospitals close? Would physicians change the way they practiced medicine?

Super Tuesday

Paul Krugman details the difference in the democratic candidates on health insurnace reform:

NY Times Article

Variability in Medicare Payments

Health Journalist Shannon Brownlee offers commentary on U.S. health care costs in the Baltimore Sun:

I have to refute one of the statement that she made however. Ms. Brownlee states that Medicare pays more to hospitals in L.A. than Salt Lake City because hospitals in L.A. have higher volumes. There are many factors that effect a hospitals payment from Medicare. There are labor market adjustments, disproportionate share adjustments, and the higher cost of living associated with living in a large metropolitan area.

Health Care Word of the Day - "Indication Creep"

Indication creep is defined as follows:

"An indication is a diagnosis of a disease, for which you have some treatment. So the indication here would be heart attack, or risk of heart attack. Statin studies have looked at people who are at very high risk of having another heart attack. ... You study these people and you find you can really reduce their risk of heart attack. OK, it's probably a good idea to prescribe these drugs to people who have heart attacks.

Then what happens is the manufacturer seeks to expand its market, and so the indication creeps outward, from people who have clearly benefited to more and more people for whom the evidence is much more shaky. We really don't have the evidence to say that giving statins to people who've never had a heart attack is going to reduce the risk of a heart attack. But they're given these drugs anyway because doctors think it's true and patients think it's true."

Interesting article that is flies in the face of consumer-directed healthcare.

The Uninsured Are Hot

Seems like more and more states are jumping on the Massachusetts bandwagon and updating their policies to cover more uninsured citizens.

Legislation in Ohio, Maryland, Washington

However, these reform bills are starting to find resistance from citizens and businesses across the country including the much publicized defeat of the California Health Reform Bill.

What's Your Bad Debt Policy?

Bad debt and charity...seems reasonably easy to differentiate the two. Many hospitals that I come into contact are confused when they are trying to report expenses related to these two categories. The Healthcare Financial Management Association is providing guidance on this issue. Their statement is as follows:

"The Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB) have clearly stated that charity care results from an entity's decision to forego revenue. Bad debts, on the other hand, result from the patient's nonpayment for services that have met the criteria for revenue recognition."

What it all costs

I stumbled across a very interesting website today. Understanding USA is website to celebrate a visual demonstration of questions and answers leading to understanding. I clicked around on it and there is information about health and the cost of health care. The text is a little small so be sure to check out the site. Maybe this will come in useful during a presentation.

Google Health

Some may be aware that Google has been working on a project to help consumers organize their health information. They call this venture Google Health and is slotted for debut sometime in 2008. It will be interesting to see how a company with the vast resources of Google is able to make inroads in the healthcare community. Kudos to the people at Google Blogoscoped for the updates they have on this project and all things Google for that matter

One of my favorite books

While this may not have much to do with healthcare, I thought I would recommend one of my favorite books that has helped my career. The book is Think and Grow Rich by Napoleon Hill. This book helped me think about how I set my goals for myself and for the organization that I work for. Enjoy!

Medicare Primer

The Kaiser Family Foundation has published a helpful pamphlet for those of us that need a refresher on how Medicare works.