Blog submission by Jeffrey Bauer, Ph.D., an independent consultant and speaker based in Chicago.
Strategic planning has grown in importance since my previous iProtean post addressed the topic (Back to the Future, August 2012). Today, the future of health care in general and hospitals in particular looks even less like an extension of the past than it did last fall. Uncertain, uneven implementation of the Affordable Care Act and increasing government austerity suggest that having a purposeful, written response to anticipated change—a strategic plan—could make the difference between desirable and undesirable futures.
Holding the current course is a viable option for very few provider organizations. The current view in my crystal ball suggests “business as usual” is the surest path to not being in business within just a few years. Hence, hospital trustees and chief executives have a compelling need to look at how their organizations are going to reinvent the way health care is delivered. Purchasers, payers and patients who have been paying the bills for the past 50 years have reached the limits of their willingness and ability to keep paying more for increasingly expensive services of uneven quality.
However, as I work with hospitals and medical staffs around the country, I still see that some leaders have not clearly defined an appropriate response to the end of growth in healthcare spending. Almost all leaders recognize the need to prepare for fixed revenue (i.e., no growth in income), but finding ways to cut costs of existing operations does not provide a path to long-run success when the marketplace is also compelling providers to fix the way health care is delivered. It’s time for a top-level review of the difference between tactics and strategy to make sure that governance leaders are exercising their responsibility to guide strategy, not tactics.
- Tactics is doing things right. Tactics requires operations leaders with clinical sensitivities and management skills to allocate resources optimally when all factors of productions are fixed. The tactical leader’s day-to-day role ismaking the best possible use of on-duty personnel for providing appropriate care, given supplies and facilities available for their use. Hospitals need excellent tactical managers more than ever to handle the pressures of keeping the doors open today.
- Strategy is doing the right things. Strategy is the job of future-focused leaders who study the realm of possibilities for reallocating resources to totally different production processes (as discussed in my previous post). Strategic leaders ask tough “what if” questions and have the courage to make changes that result in doing other things that are “right” in the context of the new marketplace. Strategy is the key to meeting demands to fix the way health care is delivered. It is the unique role of governance to keep the doors open in the future.
To illustrate the difference between strategy and tactics from an organizational perspective, a good tactician manages a service line to provide service of acceptable quality within the operating budget. Given the push toward cost-effective care, a good tactical leader focuses on finding wasted resources in current production processes and reallocating them to productive use. Excellence in managing performance improvement across the enterprise is rapidly becoming the key to success for health care’s tactical leaders.
The strategist, on the other hand, decides whether the existing supply of service lines is the right thing to be doing under future circumstances—a competitive marketplace demanding value, predictability, transparency, accountability, convenience, customer service, fair and affordable prices, etc. All these challenges require making major changes in what we do, not better management of how we do it.
Finally, today’s successful healthcare strategist realizes that making progress in all these areas requires multi-stakeholder cooperation. No single entity can make the necessary changes by itself. Envisioning and enabling long-term, win-win partnerships with purchasers (employers), payers (health plans), and patients is perhaps the strategist’s biggest job in the post-reform era where the medical marketplace has reached its limits. As Jerry Garcia once said, “Somebody’s absolutely got to do something, and it’s incredibly pathetic that it has to be us.” Us is today’s leaders in governance. Our future depends on doing something big, something strategic.
iProtean subscribers, look for the new advanced Mission & Strategy course Affiliation and Consolidation Strategies, Part One in your course library this week. The course features Marian Jennings, Lisa Goldstein, Dan Grauman and Monte Dube discussing the importance of timing when considering consolidation, the continuum of options and emerging models.
Health futurist and medical economist Jeffrey C. Bauer, PhD is an independent speaker and consultant based in Chicago. (firstname.lastname@example.org; 773-477-9339). As an industry thought leader with 40+ years experience in medical education and care delivery, he forecasts the evolution of health care and develops practical approaches to improving the medical sector of the American economy. He is widely known for his specific proposals to create an efficient and effective healthcare delivery system through multi-stakeholder partnerships and other initiatives focused in the private sector. Dr. Bauer is featured in the iProtean courses The New Healthcare Business Model, Introduction to Mission & Strategy and Strategic Planning.
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