HealthCare Voice

A Memory or A Legacy: What Kind of Leader Are You?

There are essentially two types of healthcare leaders.  Those who leave behind memories and those who build a legacy. 

Memories – good and bad – fade from consciousness.  Legacies are forever.  They are not formed by good executives.  They are built by dynamic leaders who are not afraid to take risks with big, transformational ideas.

Great leaders are like works of art.  They build a solid, patient/customer focused culture that is the organization’s heart and soul.  They develop centers of clinical and wellness excellence that are an integral part of the communities they serve.

Bad leaders – who are tragedies – leave behind second-class, dangerous hospitals, or abandoned buildings or, worse yet, a vacant lot where a hospital once stood. (Think Pittsburgh.)

A savvy Chief Executive, who engineered a stunningly successful turnaround of a New York hospital, once said that hospital boards and their CEOs lose money because they choose to.  Yes, they have a myriad of reasons/explanations why they lose, but more often than not those explanations amount to little more than lame excuses, he reasoned.  In the end, it was a matter of choice and the legacy they will leave behind – an inability to make the hard choices or to successfully execute -- that will be a tragedy for their communities

This nation’s hospital CEOs have one of the hardest jobs in all of business.  They run complex businesses that are highly regulated under the silly guise of being a free-market business model.  They have long struggled to balance reimbursement with the rising costs of doing business.  Now it is going to get tougher as Congress, whether its members want to or not, moves to reduce federal spending, which means that the reimbursement we receive from Medicare today is the most we will ever see in our lifetime.  But all is not lost.

As I travel around the country, I periodically lecture to healthcare management graduate students.  This new generation of future healthcare leaders is one of the best.  They "get" the grave challenges and the extent of the nation’s financial crisis, but they are eager to build a lasting legacy – with a radically transformed healthcare business model. 

They are works of art waiting in the wings.

EDITOR's NOTE:  In two weks, HealthCare Voice will move from this location to www.JohnGSelf.Com.  For two weeks, the blog will run on both sites and then we will close this URL and the blog will be on the web page.

© 2011 John Gregory Self

Deficit Reduction: A Threat to Publicly Owned Hospital Management Companies?

Healthcare reform and intense pressures related to this nation’s mounting deficit crisis are two forces that could dramatically alter the financial landscape for investor-owned hospital management companies.

There is a plausible scenario that suggests that over the next five to seven years all will not be well for the nation’s largest publicly owned hospital management companies. Their tribulations will occur not because they are bloated, inefficient operations. No, most are extremely efficient, a tribute to management’s laser focus on reducing costs and daily, if not hourly, scrutiny of performance metrics, mainly staffing. Because they are publicly owned, the real threat will come from their inability to meet Wall Street expectations for year over year growth in earnings.

As Medicare reimbursements are reduced -- most certainly to be followed by cuts in payments by the nation’s managed care providers -- hospitals all across America will get less money for the services they provide. Highly efficient investor-owned hospitals, which have for years bragged that they were lean machines, unlike, they say, the stodgy, poorly managed not-for-profits community medical centers will have less opportunity to reduce costs to maintain margins. This is not to say that investor-owned hospitals will suddenly begin losing money. They won’t. But -- and this is a big but -- they will not be able to sustain their historical performance in terms of growth in earnings, something Wall Street demands. There is only so much fat you can cut before you start hacking away at the bone, the core of your business.

There is an old story of two men flying in a remote region of the Andes Mountains when a vicious storm forced them to make a crash landing. One man was overweight -- some would stay fat. The other was a long-distance runner, the picture of good health. The overweight man survived while the fit man died -- because he had no excess body fat to burn when they ran out of food.

Investor-owned hospitals which depend on their growth in earnings to sustain investor confidence, which then paves the way for access to capital with the most favorable of rates, will face more skeptical lenders and less flexibility to acquire more hospitals in healthcare reform’s period of consolidation. Instead, look for some investor-owned companies to spin off their marginal performers to not-for-profit regional health systems or new, marginally capitalized start-ups. In the end, the losers will be the physicians and the communities who thought they had ensured the future of their hospital when they sold out years earlier.

Isn’t reality ironic?

What do you think?  Is this a plausible scenario or a misread of how deficit reduction cuts to Medicare will impact hospital management?

© 2011 John Gregory Self

 

EDITOR's NOTE:  In two weks, HealthCare Voice will move from this location to www.JohnGSelf.Com.  For two weeks, the blog will run on both sites and then we will close this URL and it will be on the web page.

Lloyd Self's Five Rules for Business

As we race to the end of yet another year, I am taking some time off to rest and recharge, and to reflect on a very successful 2011.   

This is a great time of year; we are enjoying the fruits of our hard work and our considerable success.  I am using the time to plan for the next business year. The is particularly exciting for me because we bare making some changes that are designed to significantly enhance customer value while accelerating our growth.

I spent some time this week reviewing my blog archive.  I ran across the following blog entry that I wrote a year ago about my father's values in business.  It seems particularly relevant for 2012 and so I want to share it with you again:

    ____________________ 

Working for my father during my teenage years in his highly successful retail bakery in Tyler, Tex., I learned some  of life's important rules and key lessons of business.  He died in 1989 but today he remains my True North. 

Here are Lloyd Self’s Five Rules.  He never wrote them down; he just lived them.

1.  Do what is right, even when no one is looking .

2.  The customer comes first.  Honor that.  It is not just a rule; it is who you are. 

3.  The customer is not always right.  See rule #2. 

4.  Quality counts. 

5.  We all make mistakes.  We all get tired.  We all want to cut corners because of time or fatigue. When that happens, remember rules #1 and #2.

 In more than 16 years of interviewing and watching CEOs and other senior executives as a partner in an executive search firm, I have added another very important rule.

6.  Respect your employees as if they were your customers.  You will get more for your money.  Do not yell at, bully, or criticize your employees, especially in public.  There is no room in any company for an abusive leader.

We should pause and reflect throughout the year and measure how we are doing against these "rules."  If we do that, we will become a better leader. 

Happy New Year to you and your family.

© 2011 John Gregory Self

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Technology and Media: Remarkable Visions For The Future

As we cruise through the final days of 2011, the scribes of media and technology are busy laying their visions for the future.

Based on two articles in Monday morning’s New York Times, we should all fasten our seat belts, 2012 is going to be a fast and fascinating ride.  For healthcare organizations, many of which are struggling mightily just to implement and remain current with basic  information systems infrastructure to improve patient safety and operating efficiency, these predictions may evoke a dire question: How can we afford to keep up?  For an industry that trails other business sectors from five to 10 years in terms of information systems, that is a legitimate concern with some interesting consequences.  But that is a question for another day.  

Let’s start today with something as basic as the remote control for the television.  Respected media writer David Carr of the New York Times characterizes the current evolution of the remote as “...a little like hitting your television with a stick until it delivers what you want.  If things go as they should, we will spend less time looking under the couch for the remote and more time telling our television to get us the seventh episode of the second season of ‘Boardwalk Empire’.”  This month “Xbox 360 owners were already able to search TV shows by voice.  “...someday I should be able to walk into a hotel in Kansas, tell the television who I am and find [all the content that] I have [previously] bought and paid for, there for the consuming,” Carr writes.  This is one of the many promises of Cloud computing.  

“The iPad on your lap is a screen that makes it easy to navigate toward a completely personal experience.  That screen on your living room wall is going to have to perform the same way to remain relevant.”

Traditional content providers like the Wall Street Journal are already adding hours upon hours each month of video content to the web site to provide greater context for the stories in the morning business newspaper, still the largest daily circulation in the United States.  Venerable papers like Mr. Carr’s New York Times will either master the integration of video with written content, creating new value for paying subscribers, or they will perish.

Once news content providers with minimal presence in the U.S., like the BBC and Al Jazeera, “are no longer regional curios, they are here,” Mr. Carr explains. (FYI, current and former state department officers say Al Jazeera is a good source of information regarding developments in the Middle East, and the thinking of the Arab Street.  BBC broadcasts on numerous US NPR outlets.  This, too, is a great source of world news that most US TV networks and newspapers no longer cover.)

Most people do not know who Bernie Meyerson is and feel no compulsion to learn more about him.  They should.  He is the Vice President for Innovation at I.B.M. and a highly regarded researcher in advanced microprocessor design and computer systems.  It is Mr. Meyerson who ovrsees I.B.M.’s list of technological innovations that they think will come true in the next five years:

1. Small amounts of energy created by actions like people walking, or water running through a pipe, will be captured and stored in batteries and used to power things like phones, cars, or homes. ”You will see new ecosystems for generation and capture,”  the NY Times quoted Mr. Meyerson in its Monday morning BITS section.  “You [people] generate 60 to 65 watts [of energy] while walking.  You could easily use that to power your phone forever.”
2. Passwords as used today will disappear as increasingly powerful phones and sensors will store your personal biometric information.  This will enable computers and other machines to validate who you say you are.
3. Sensors on and inside the human brain will allow for the mental control of objects.  There are already experiments where the mind moves sensors, but Mr. Meyerson goes further: “You will observe thought patterns, which are highly personal.  You can use this to better understand stroke or disorders like autism,” Mr. Meyerson predicted.
4. Powerful mobile devices capable of precise language translation will belong to 80 percent of the world’s population.  Ubiquitous voice recognition and translation capabilities will make the phones useful to large segments of the population that are illiterate  or who use languages that are not easily written with keypads. (Does anyone think the world can become flatter?)
5. Personalized information filters and search will bring you only the information you want.  “This will invert the premise of marketing. The [smart] phones will start to be your advocate, recognizing what is near and dear to you and getting it.  Instead of companies speaking to you, you will reach out to companies.” (This makes Seth Godin’s Permission Marketing, a novel concept of the Fast Company era of the 90s almost irrelevant.)

A county judge in Fort Worth once said of major change:  “The train is on the tracks.  You are either on the train or on the tracks.”  

That seems to be remarkable guidance for those of us in healthcare as we scramble to adapt to these technological changes.

© 2011 John Gregory Self

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