HealthCare Voice

HEALTHCARE'S INCONVENIENT TRUTH: Medicare's Shocking Deficit Creates Opportunity For Innovation

A highly regarded healthcare strategist told me this week that in the not too distant future hospitals must be able operate with a “Medicare Minus” expense structure to survive. That means adjusting operating costs for services to a range of three to five percent below the amount Medicare pays for a case, he said.

As Baby Boomers flood into the Medicare program, many hospitals will see Medicare become a significant, if not dominant, part of their overall reimbursement. These are the same Baby Boomers, with their private health insurance plans, that now provide most healthcare organizations their operating margins.

Whether that prediction is accurate is up for debate. What is not debatable is that the federal government, facing staggering unfunded liabilities for the Medicare program, will be forced to cut payments to hospitals. Ironically, hospitals that are expanding capacity to meet an expected surge in admissions from aging Baby Boomers must also be wary of how lower Medicare payments will affect their ability to repay the debts.

Today, these trends and predictions do not qualify as a near-term game-changing event, but you get a sense of why increasing numbers of health systems, hospitals and other providers, are beginning to look at their operating expenses, and, in particular, the money they spend on consultants. Remember the recent USA Today report – that each of the nation’s 5,700 hospitals must cut $2.6 million a year in expenses for 10 years to achieve savings necessary to pay for the President’s proposed healthcare reform. Even if the reform initiative dies yet again, the $37 trillion in unfunded Medicare liabilities is the real driver of change here, not Congress.

Over the past several weeks, as I have talked to executives from health systems, hospitals, allied health companies, and consulting organizations about healthcare reform and market trends, I am hearing some interesting ideas on how consulting, recruiting and other professional service firms need to change.

What I am hearing is that this focus on cutting costs that consultants are writing off to the bad economy, is here to stay. With increasing regularity hospital leaders are saying that the golden era for fat consulting fees and open-ended project expense budgets is over. Gone.

One major university medical center reported that they would significantly reduce the number of executive searches they award to outside firms. This report is not the exception. In Texas, major health systems are “going inside” with executive and management recruitment, staffing services, and talent development resources because they can achieve significant cost savings.

One executive reported that he believes his internal recruiting team has produced better panels of candidates. One Texas system reported that five years ago they used search firms eight or 10 times. Today that organization has all but eliminated the use of outside recruiters. I have found similar examples of this approach in healthcare organizations in Florida, Ohio, Pennsylvania, New Jersey, and Illinois; from the east coast to California and the northwest, larger systems have or will enact similar plans. This trend will only grow as these early adopters validate their expense reduction assumptions.

This does not mean that professional service firms are doomed for eventual extinction. Nothing could be further from the truth. Companies that can deliver services that produce measurable results in performance improvement, enhancements in quality of care and patient safety, and more efficient management information systems, for example, will continue to thrive. However, this changing economic climate does mean that these companies, must be creative in how they organize, price and deliver these services.

1. Off-the-shelf consulting templates executed by junior consultants are out. In are customized solutions that are implementable and produce sustainable value.

2. Out are one-size-fits-all executive search engagements. In is unbundling and services designed to support hospitals that reduce their reliance on third-party providers.

The traditional executive search model has been around for 55 years and there are some very clear signs that changes are in the air. In a little noticed Business Week article in January, the CEO of global search consultants Heidrick & Struggles predicted that annual revenue would shift from 95 percent from traditional executive search services to 50 percent. He is cutting costs, moving his firm into new service lines, and repositioning the company as a leadership advisory organization. He predicted that the largest losses in the executive search space will come, not from the high end CEO and board recruitment projects, but the lower echelon – in the $300,000 range and below, precisely in the space where the majority of healthcare assignments originate.

3. Out are contingency recruiters that are fee, not value driven. Some hospitals will pay 23-to 30 percent of a candidate’s first-year salary to a recruiter who does little more than provide a resume. In are recruiters who will accept lower fees to provide candidate sourcing services to augment internal resources.

4. Out is the tendency to use multiple recruiters. In will be the firms that can legitimately provide recruiting support from the C-Suite to the Director level, allowing hospitals to focus on price and quality for the services they receive.

These are unsettling times for everyone. Hospital leaders are certainly not thrilled with significant cuts in reimbursement that they know are coming over the next 15 years. They know that ultimately it is Medicare that represents the biggest problem with the U.S. deficit. They know they must reduce their operating expenses.

What healthcare leaders need today are not “business-as-usual” consultants, but creative business partners who will help them reduce costs and improve value.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch</strong>. He is an active member of Linked In and a frequent editorial contributor.

Seed Newsvine

ONBOARDING: An Essential Program For Winning Organizations

Onboarding is a new human capital management program that is rapidly gaining popularity with business leaders in all sectors who really understand that their employees are their most important asset.

What is onboarding? For most human resource executives the term is self explanatory. For the purpose of this column, a formal definition is in order. Believe it or not, Wikipedia explained the concept in a succinct manner without the typical consultant jargon common among those who want you to buy their onboarding program.

“Onboarding is the process of acquiring, accommodating, assimilating and accelerating new team members, whether they come from outside or inside the organization. The prerequisite to successful onboarding is getting your organization aligned around the need and the role.” For more information, visit Amazon and review, “Onboarding, How To Get Your Employees Up To Speed In Half The Time,” by George Bradt and Mary Vonnegut.

If the definition of executive search is the process of getting married after four or five dates, and truth be told that is exactly what candidates say the recruitment process is like, then why would an organization spend thousands or hundreds of thousands of dollars on recruiting a key executive or manager without giving much thought to onboarding the individual into the organization to accelerate their contributions and to ensure a long and successful tenure?

If the cost of a miss-hire is conservatively estimated to be between 50 to 200 times annual salary, depending on title and scope of responsibility, why would an organization just throw together a new employee orientation program that is frequently more about signing paperwork with an uninspiring Power Point presentation describing benefits, rules and regulations – this is how you get fired here -- blandly delivered by an HR assistant, not an engaging program designed to get employees up to speed while learning about their new professional home?

In a blog on the four deadliest sins of onboarding programs, author/blogger/consultant David Lee quotes Rex Castle a senior executive with a Lubbock, TX bank:

“…you sign and sign more paper than you would if you were buying a house, and then you walk out thinking, ‘Man, I hope I don’t get fired, but at least I know how to get fired’.”

Onboarding programs are still skeptically viewed by some organizations as an unnecessary expense. It would be safe to bet that these are the very organizations which apply the same level of financial analysis to the equally important management development programs. Executives who believe that – who allow that point of view to rule in their organizations -- are destined for significant challenges unless they can change the culture.
So this begs three big and a very important questions:

1. If employees – now defined as human capital in the world of consultant speak – are our most important resource, why do we play Russian Roulette with the sizeable investment we make in recruiting them to our organizations?

2. Why aren’t more healthcare organizations investing in gold-plated onboarding programs to ensure success and reduce costly turnover?

3. Why is any of this important at a time when the public seems more concerned with government spending and the overall cost of healthcare, not whether a particular institution invests in its people?

Well, let’s start with the escalating costs of healthcare and the increasing number of stories about the inefficiencies of hospitals and the incredible waste that exists in far too many of our top-tier medical centers. While no one knows for sure what the economics of healthcare reform will be, it is a very safe bet that the federal government will make additional Draconian cuts in Medicare payments to hospitals. Hospitals will be forced to dramatically cut costs and redesign processes. Ironically, this will lead to an increase in turnover within the executive suite which is an important reason for organizations to develop an effective onboarding program.

There are so many areas in a hospital where expenses can be cut. One area that is frequently ignored is the money spent on miss-hires and employee turnover. For many larger hospitals, this is a HUGE number. For example, if your RN turnover is 60 nurses in a year, the cost is conservatively estimated to be around $2.7 million. Conservatively. If the turnover includes key clinical personnel in the OR or ICU, that number WILL be higher. If you botch a mission-critical executive hire, with a base salary of $300,000, human capital experts conservatively estimate the cost of this mistake to be between $500,000 and $ 1 million. In the case of a recent CEO termination at a health system, the cost to the healthy system was estimated to be more than $4 million, including lost opportunity time and the losses the now departed CEO piled up with questionable judgment and poor execution. That number is still being counted and could easily top $5 million before all is said and done.

Onboarding may be an expense, but it is an expense that the well managed healthcare system can ill afford to do without.

Thankfully, onboarding is moving front and center in the human capital business.

Over the next week, I plan to write about onboarding – when it starts, how it should be structured within the organization and how healthcare organizations should measure its success.

I hope you will share your thoughts.

This is an important concept to master. Effective leaders cannot afford to be on autopilot on this one.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

Seed Newsvine

HUMAN CAPITAL: Time To Invest Is Now

DALLAS (June 14, 2009) -- As I think about the best Chief Executive Officers and senior executives with whom I have had the pleasure of working, there are several qualities that come to mind: their depth of understanding, their attention to detail, their ability to communicate ideas and their passionate emphasis on recruiting and developing their team.

Some of these leaders are tough. They establish high standards of performance and do not suffer mediocrity gladly. Subordinates who do not perform at a high level will hear about it. These leaders know the detail and are comfortable deep diving to get the information they want, when they want it. They can be very specific about how they want certain things accomplished. While their direct reports may feel like they are being micromanaged, the CEO justifies this style based on his or her self-confidence and, of course, the results they achieve. That they occasionally chastise or ream out a vice president or other direct report in front of their colleagues is the price of an honest open dialog. When things are going well, this type of leader has no incentive to change. “This is just who I am,” is a favorite response. Leaders who rely on this model may get results but they rarely earn the trust of the people they lead. Nor do they see leadership development as an essential strategic initiative for success.

Can you imagine how much more successful an organization could be if the foundation of the leadership culture was built on respect and trust? That is a foundation with exceptional downstream value for the organization. In healthcare, it will foster improved quality of care, patient safety and satisfaction.

Outstanding leaders spend the vast majority of their time communicating with and developing the team. Jack Welch, one of the twentieth century’s most successful executives, certainly understood that point. He frequently said that developing his team was one of the most important things he did as a CEO, and the time he spent teaching at GE’s leadership development institute, which is located on 53 acres in Crotonville, N.Y., remains as evidence of his profound passion and commitment.

There was no confusion about GE’s vision, mission, or values. There was no mistaking its cultural pillars of execution and accountability. “Best effort” – an excuse for not achieving corporate goals -- cannot be found anywhere on GE’s web site or in its education materials. It is not surprising, then, that today, years after Mr. Welch left the scene, 90 percent of GE’s top 600 leaders are promoted from within.

Far too many CEOs are not engaged in leadership development. It is no wonder that leadership development is seen as an expense, not as an investment.

Last year as the seriousness of our current recession emerged, I wrote that it was time for CEOs to dump weak leaders and their poor performers and to strengthen their teams to weather the coming storm. While there is ample evidence that many organizations shed what they felt were marginal performers, or executives who were not essential during a period of no growth, there is little to suggest that healthcare organizations made widespread investment in their leadership engines.

Now, as the economy appears to be on the verge of a long and arduous recovery, CEOs who are prepared to act to invest in and strengthen their leadership teams will emerge as strong winners. For some this may seem counter intuitive in tough economic times, but, believe me, it is one of the best decisions a CEO will make in his or her career.

Now is the time to invest in human capital, one of the most frequently overlooked assets on an organization’s balance sheet.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders. You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch.

Consulting Fees & Conventional Wisdom

LOS ANGELES (June 8, 2009) As I travel around the country visiting with chief executive officers at health systems and hospitals, I am hearing that consultant accountability is a subject that is increasingly on their minds. Faced with the continuing slide in their payor mix driven by the deep recession, and the reality that they must do more with less, CEOs say they are looking for true partners – people with exceptional expertise or a portfolio of relevant products and services – who are willing to guarantee that the work they sold will deliver the measureable results they promised.

Increasingly, CEOs also are acknowledging that they are equally responsible for the success or failure of a consulting engagement. They are taking a more aggressive approach is defining their expectations for service, quality of the work and measureable results that will be derived from the engagement. This is certainly consistent with many of the comments that I received on a recent blog I wrote: Professional Fees: Entitlement Versus Accountability (Scroll down to read). One CEO wrote that I probably should have titled that column: Accountability: Biting the Hand that Feeds.

Healthcare CEOs know that the political, financial, regulatory and leadership landscape is changing under their feet. They realize that continuing with the mindset of business as usual is a bad option that could be career limiting. Relationships are important. Results matter. Now, so do the professional fees and expenses they routinely pay their advisors.

Not surprisingly, this emerging press for lower fees and tighter expense management is moving to the forefront in defining future business relationships in healthcare. Last year I lost a project because the professional fee I offered – one that would ensure that the engagement was comfortably profitable for our firm (versus really, really, profitable) apparently was not high enough. The consultant who represented this health system in the selection process explained that board members were concerned that I could not deliver a quality project for the price I promised even though our reputation and our varied references said that we have consistently delivered on our commitments. The selection committee picked the most expensive firm in the bidding and then clashed with the partner throughout the engagement. They did not follow his advice. In the end, the Board made the right choices but there was no financial alignment, there was no real partnership with their highly paid consultant.

Historically, the conventional wisdom in business – especially in consulting – has been that you get what you pay for. Okay, I admit there is certainly a history of CEOs who are willing to pay more to be “safe.” However, it is important to note that conventional wisdom is rarely right. There are so many examples where price is not a guarantee of value. Price is important but measureable value is essential. Innovative firms who understand this shift in the consulting landscape are moving to create new ways to meet client needs.

Discounting professional fees is not the answer. Simple discounting does not address the critical issue because simple discounting fails to align the needs of the client with the financial interests of the consultants, the quality of their work, and the value of their recommendations. The answer is, and will always be, shared risk and reward: partnership.

CEOs with whom I visit understand that we have entered a new era of management. That performance and accountability of consultants – indeed all vendors – is more important than ever and that partnership must be more than mere words in a marketing brochure or advertisement in Modern Healthcare.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders. You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch.

SWAN DIVE: From the Frying Pan Into the Fire

FORT WORTH, Texas (May 27, 2009) – One of the toughest career management decisions is when to leave your current organization. Chief executive officers, vice presidents, and even department directors all agonize over this call.

So many factors cloud our thinking.

Based on my interviews with senior level candidates over the past several years, I am finding that there are many reasons/excuses that give us pause when deciding to move on. Leaving when things seem to be going well at work is counter-intuitive. Perhaps our kids are in good schools, they are probably involved in sports or other activities; they have wonderful friends and they are adamant in their opposition to relocation. Or, the spouse is happy with his or her job; there is a great support group of friends and an ideal quality of life. More than likely there is some mixture of all of the above.

There are risks in staying. There are risks in leaving.

Business is changing. So, it is not surprising that there are non-family factors that are equally important to consider when making a decision to stay or leave. Let us look at the CEO turnover rate. The average CEO tenure is 2.5 years over all sectors, according to several recent studies. If that is not disconcerting enough, the average recruitment “stick rate” – the average tenure of all executives and managers who are recruited to new jobs – is a shockingly short 18 months. This number covers all facets of recruitment – from retained and contingency contracts to internal recruitment. Presumably, the contingent recruitment of lower level department directors or managers is driving the overall stick rate down. Nonetheless, these are troubling numbers if you sit on a board selection committee or run a company, and worrisome if you are a CEO or other executive or manager who is trying to plan the right time to move on.

No one wants to execute the perfect swan dive from the frying pan to the fire.

When I entered healthcare in the mid-1970s, the gold standard for stability in employment – and thus making you more attractive to executive search consultants – was 7 to 10 years in one job. That tenure reflected a level of stability and accomplishment, recruiters thought. Today, if you are seeking a senior level position in a healthy system or larger hospital, recruiters want to see diversity in experience and accomplishment – between five and seven years. They reason that this demonstrates that you can master a multiple of cultures and challenges, thus increasing your chances for success in a new environment. Candidates who have stayed in one job for more than 15 years could be in trouble, one career coach said recently. After 20 years in one job, pray that you can retire because your desirability as a CEO or other senior level executive is greatly diminished.

The trick is to have a career plan that is married to reasonable, grounded expectations. It is critical to have your family on board with these new career realities. They are frequently the reason a CEO stays too long. One bad departure – with nasty press reports that will almost certainly find their way on to Google – is a career limiting or ending event.

I know this sounds very unfair, even uncivilized, when it comes to what is in our family’s best interest. After all, these were not the career rules 15-20 years ago when most senior executives began their climb to leadership.

Regrettably, the market is changing. This change, especially as it relates to career management, is accelerating. If you are a healthcare executive leading a not-for-profit hospital, the challenge of managing your career is going to change again as we emerge from this deep recession. These CEOs will probably find themselves in an environment that is akin to working in a public company – more pressure to produce solid financial results and to meet rising community benefit expectations that is now a hot button with the IRS and Congress. And to do it every quarter.

Now here is the kicker. As Medicare and Medicaid payments are reduced, which will occur regardless of what happens with healthcare reform, the demands on not-for-profit hospitals for charity or deeply discounted care will only intensify.

All of these issues are forcing the CEOs of tomorrow to adjust their life and career plans. Twenty plus years in one organization may be a thing of the past.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders. You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch

Professional Fees: Entitlement Versus Accountability

DALLAS, Texas (May 17, 2009) – Long ago, before I became a consultant, I was a client. And as a client I learned some very important lessons that today shape the way I look at my business and the values on which my Firm, JohnMarch Partners, was founded. This is a column about my thoughts on our existing consulting business model, the fees that are charged, and some questions regarding how we should marry the concept of entitlement and accountability.

Some of my lessons as the client of consultants were embarrassing. I will always remember being summoned to the CEO’s office who was outraged at an expense invoice he received from a consultant that he had hired but I was assigned to manage. The offending expense was a rather costly dinner – with wine that the consultant selected – at a high-end steakhouse. I was stunned, evidence of my obvious inexperience in the dealing with clever consultants. The consultant had invited me to dinner. He had picked the restaurant. But alas I got the bill – and a severe lecture from my boss – a month later. Never again, I resolved.

In another case of what I consider consulting run amok, a North Texas health system was interested in acquiring the services of consultants to help evaluate strategy and financing of a new business venture. We selected a nationally recognized firm for the work based on the knowledge, experience, and reputation of the partner who led the presentation. He made a compelling presentation. However, as the engagement unfolded, the partner was AWOL except for an occasional whirlwind site visit, or in a service recovery mode in response to telephone calls from the CEO. Even that improvement in visibility was short lived. I have learned over the years that the definition of partner is “bringing in new business;” the actual client work is all too often relegated to junior staffers.

While my experiences as a client working with consultants occurred during relatively robust economic times and may well have been the exception to the rule, I have noted that the one thing that is absolutely certain about our current deep recession is that it causes the smart leaders to take a step back, re-examine expense management and ask some basic questions:

1. Do we need to spend this money now?
2. Do we trust our judgment or do we need outside consultants to confirm our options and validate our judgments?
3. Do we have the resources and talent to execute the work internally? If we use outside resources, what value – what measurable benefit – will flow to the organization?

As the economy continues its profound slump, healthcare leaders are looking at the very real possibility that some type of healthcare reform will pass Congress this year (read: reimbursement will be cut again). I am hearing current and potential clients begin to ask questions about the linkage between the professional fees paid to consultants and the concept of entitlement and accountability. The underlying principle for the consulting business model is much like any other service business: we performed the work; ergo we are entitled to our fee. So far so good. Consultants, auditors, strategic advisors and, yes, executive recruiters, should be paid for the work they perform, and the advice they give, assuming they delivered their services according to the terms of the engagement. That is simple enough.

Now this is where it gets a little dicey. What about the value proposition? What value does the client derive from the work performed? Did the client benefit from the advice? What about the quality of the work product? Did the report, recommendations, or the panel of recommended candidates have credibility with the organization’s employees, customers or other stakeholders? Should we connect the idea of fee entitlement with the concept of holding people accountable for the quality of their work and the results? In other words, if the critical value benefits do not present themselves, should the clients be paid as much? Should consultants and search firms be willing to share this risk?

Another way to look at this interesting proposition is to ask ourselves should we expand the scope of how consultants define a successful engagement? For example, in executive search, should the client hold their search consultant responsible for developing a panel of qualified candidates as well as the tenure and performance of the successful candidate? Most top-tier firms currently receive a final payment based on a percentage of the candidate’s bonus. This “true-up” payment is typically tied to the same rate used to calculate the processional fee, usually 30 to 33 percent of the first-year cash compensation. Should we consider shifting more of the fee to the back end, tied to the candidate’s performance?

In the case of a turnaround firm, should they be paid as much if they fail to return the organization to profitability, assuming that is what they proposed to do in the course of a very costly engagement? If they make tactical missteps or botch an MIS implementation that will cost the organization millions of dollars, shouldn’t a portion of their professional fee be denied?

We have all received bad consulting advice – on strategy and marketing, in law, with our taxes, or the money we invest. Is it possible to shift the various consulting or professional service business models so that consultants are willing to share financial risks?

Perhaps this concept of accountability is not practical but I do think that it is a conversation worth having.

These tough economic times are forcing clients to question their consultants in ways that would have never occurred two or three years ago. Moreover, I sense that a larger question is emerging. Are we going to surface from this turbulent economic period with a new set of beliefs and values that will forever change how we look at these issues?

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, and business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to select consistently the right leaders for a client's organization. You can contact Mr. Self at 214.220.1234 or [email protected]. Or, you can follow him on Twitter at Self_JohnMarch.

A Culture Of Hiding Mistakes?

DALLAS, Texas (April 26, 2009) -- As I continue my series of blogs on leadership, I read a story on the HealthLeaders.Com web site that once again brought into focus the important role a health system or hospital CEO plays in setting a leadership culture that ensures that his or her patients are safe.

DON'T HIDE YOUR MISTAKES

Philip Betbeze, for HealthLeaders

“Nobody wants to harm patients, especially the CEO, but according to Rick May, M.D., an orthopedic surgeon (who)consults for HealthGrades, it's likely your hospital has a culture of hiding mistakes. And it's lurking, just waiting to bite you.

“According to a recent study by the healthcare ratings organization, a Medicare beneficiary experiences a patient safety event every 1.7 minutes. And the innocuous nature of the word "event" doesn't effectively describe that it's a synonym for mistake, sometimes one that ends a life prematurely. Some 913,215 patient safety events occurred during the scope of the study, which was conducted from 2005-2007. That means approximately 2.3% of the nearly 38 million Medicare hospitalizations resulted in an error.” (To read the entire article, visit the HealthLeaders site. It is a great resource for ideas and information.)

This story is disturbing but NOT surprising.

If you look at the number preventable mistakes that lead to death or complications, if you look at the number of deaths from failure to respond, it is clear that there are a multiple of barriers at hospitals across the country that limit our ability to improve the quality of care and patient safety.

A good leader must own the responsibility of creating a culture that breaks down these dangerous barriers – a culture that does not tolerate anything that might result in harm to a patient.

My days of hospital operations are over but I still have a responsibility for helping to improve my industry’s performance. At JohnMarch Partners, we have added an entire section to our already extensive candidate screening interview process that focuses on prior performance, attitudes concerning transparency, and experience in changing an organization's patient care-safety culture. In short, we want to know, conclusively, whether they walk the talk.

CEOs cannot rely on quality of care /safety “programs” or “initiatives” to achieve sustainable results. A CEO who strives to be a great leader will invest emotionally and physically in this effort.

This is not a challenge that can be solved sitting behind a desk, out of sight to those taking care of patients. Everyone in the organization must clearly understand that quality and safety are THE two most important elements of the organization’s mission. They must understand that that there can be no excuses. They must understand that there are consequences for the dangerous organizational silos that exist in virtually hospital in the country. They must know that there are consequences for the silly turf wars that executives and managers sometimes engage in. They must believe that there are consequences for not paying attention to the details or following basic practices of delivery care. The list of things that can go wrong is long. Preventing mistakes is a complex process but there are consequences if we fail to reach our goal of defect-free care. A patient dies or suffers pain. Or, at best, incurs more expense.

These consequences are why it is important for the CEO – the leader – to own the results, to make quality care and patient safety more than a program or an initiative but a way of EVERY day life in their health system, hospital, nursing home, or healthcare delivery venue.

I have had a very personal experience with a preventable mistake -- a never event -- and I never want to experience that again. Sadly, I am joined by hundreds of thousands of people – from industry colleagues to people from coast to coast who trusted that the care they would receive would do no harm.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and consistently selecting the types of leaders who will succeed. You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch.

Healthcare Leadership, John Griffith and Much More...

ANN ARBOR, Michigan (March 19, 2009) – One of the great parts of my job is speaking to healthcare executives, early careerists and graduate management students across the country. For me, the real value is the opportunity to spend time with some very bright people like Dr. Christy Harris Lemak and discuss how we can improve our leadership and the performance of the organizations that we lead.

Today I spoke to a large group of graduate students at the University of Michigan’s top-rated health services administration program – the home of the legendary John Griffith, teacher, mentor, author, and renowned thought leader on the management of healthcare organizations. In so many ways, for so many years, Professor Griffith has set the standard for educating future healthcare leaders and for setting important standards for running a well managed hospital.

The University is paying tribute to his accomplishments through the development of the Griffith Leadership Center that will focus on health management and policy. Linda Grosh, the Center’s Managing Director, and other faculty members are planning some exciting and innovative initiatives. I will not step on the Center’s public relations thunder because so much of what they hope to do in the future is in active development. Suffice it to say that I think this Center will become an invaluable resource for healthcare CEOs who seek to adjust their leadership styles, values, and priorities to the varied challenges that will change and/or intensify with lightning speed during the span of their careers.

The University of Michigan is working hard to educate exceptional graduates – our future leaders – who will be less siloed, who will be more aggressive in challenging accepted systems and outcomes, and who will see opportunity that no one else sees. How timely, since we cannot afford to operate the world’s most expensive healthcare system with clinical and safety outcomes that are far from cutting edge.

In our world today, hospital CEOs are frustrated, doctors are unhappy, and employees are stressed. The current economic peril in which we find ourselves threatens to blur our focus on improving quality and ensuring safety. To make matters just a bit more interesting, business leaders, unions, pro-business trade groups and even industry insurance lobbyists all now agree that we can no longer afford our brand of healthcare. To make matters more interesting, some members of Congress seem to be trying to exert more control over the solution.

So to the many students and healthcare professionals that I have seen this year, and to the hundreds more that I will meet next week in Chicago when I speak at three sessions of the American College of Healthcare Executives annual Congress, I urge you to think critically about how we can reform our industry in a way that improves quality, safety and access while reducing costs. Speak out here, on the HealthCare Voice site, or any and all available venues. Please do not stand on the sideline while our trade association policy gurus, the Washington policy wonks, economists, business roundtable types, unions,insurance lobbyists and the other usual cast of suspects make decisions concerning the structure, delivery, and reimbursement of healthcare.

The vast majority who will weigh in on healthcare reform have never taken care of a patient, run a hospital or a long term care facility or managed a medical practice. It is extremely important that the aforemention list of healthcare reformers listen carefully to those of you who are in the trenches – those of you who can make considered and thoughtful recommendations.

John G. Self, Chairman and Founder of JohnMarch Partners, is the Firm’s senior client advisor. A 32-year veteran of the healthcare industry, he is a former investigative reporter and crime writer for a major daily newspaper. Candidates and clients say he is one of the most thorough executive recruiters working in the healthcare industry. You can reach John at 214.220.1234 or email him at [email protected].