How Do We Solve the Schism in Healthcare?

Editor's Note: Following last week's post, I received some "spirited" comments on my choice of words describing the psychiatric state of healthcare in America. Enjoy. As always, you can find all my blog posts from 2013 to the present on my website at

Last week, I wrote about the sharp divide between management and healthcare providers in America - hence the title of this offering - the "Schism" in healthcare. I believe that the solution to closing the gap will neither be found in EMR's nor in spreadsheets. All either of those do is to highlight the differences between management and providers in how they measure their work.

Organizational Health
I think part of the answer is to look to the business world. Many business magazines publish lists of the most profitable, most successful, or fastest-growing companies. Naturally, readers will be tempted to conclude that the people running these organizations must be "smarter" than those whose companies didn't make the list. But in many cases--in fact, in most cases--that's not true.

Don't get me wrong: The leaders of great companies are smart, but they aren't necessarily smarter than those of the companies they compete against. The truth is that intelligence, knowledge, and domain expertise are vastly overrated as the driving forces behind competitive advantage and sustainable success. What is severely underrated is the critical importance of organizational health, which comes down to management, strategy, operations, and culture all fitting together and making sense.

We live in a time when information is easily accessible. In a sense, knowledge is a given. I have yet to meet members of a leadership team who I thought lacked the intelligence or the domain expertise required to be successful. I've met many, however, who failed to foster organizational health. Their companies were riddled with politics, various forms of dysfunction, and general confusion about their direction and mission. As a result, they couldn't leverage much of that vaunted intelligence.

Why don't more companies recognize the importance of organizational health versus intelligence? Because academics and analysts have for years attributed business success to knowledge, expertise, and brilliant ideas. Following some hasty forensic analysis on list-topping companies, they routinely conclude that the winners' successes result from their ability to outsmart the competition. They try to convince us that Whole Foods first succeeded in groceries because of its expertise in organic food, or that Southwest Airlines has triumphed thanks to its brilliance in fuel hedging and ticket pricing, or that Starbucks's prowess is mostly about real estate and marketing.

But those intelligence-based assets are the dividends of those companies' investments in organizational health. Leaders of these firms will tell you over and over that they cherish their cultures more than they do any single strategy or form of intellectual property.

Is the above focus on building culture playing out in healthcare? Rarely; so much so, that, when it does, it stands out. First and foremost, the original pioneer in creating organizational health was Virginia Mason Hospital in Seattle, WA. Finding themselves in serious financial difficulties in an overcrowded healthcare market in the Pacific NW in the 1990's, they decided to find a solution. By chance, the CEO, Gary Kaplan, MD, met a consultant for Toyota on an airplane flight and what resulted from their conversation has been what could be called, a disruptive approach to delivering healthcare. 

In 2002, after several trips to Japan, bringing along both Trustees and Senior Managers, Virginia Mason embarked on an ambitious, system-wide program to change the way it delivered health care and in the process improve patient safety and quality. It did so by adopting the basic tenets of the Toyota Production System (TPS), calling it the Virginia Mason Production System, or VMPS. To say it was a rocky transformation, at first, would be an understatement; many doctors and leaders left as it was implemented. But, slowly, as it started producing positive results, the atmosphere changed and today, Virginia Mason is a recognized leader in transforming healthcare.

Taking their early success to the next step, the Virginia Mason Institute, the educational arm of Virginia Mason, was established in 2008 to share what has been learned throughout the transformation journey to improve quality and patient safety with other health care organizations both in the US and around the world. With a motto of, "Putting the Patient First, Systemwide"; i.e., the perfect patient experience means the patient comes first — above everything and everyone. Since it was founded, the Institute has gathered a sound and comprehensive knowledge base in patient safety and experience, nursing, operational leadership, Kaizen Promotion Office leadership and mentoring. Putting that into practice, VMI offers it clients how Virginia Mason built its processes around the patient, By the end of 2014, the VMI faculty had taught new clients from Australia, Canada, Denmark, Germany, Iceland, Japan, the Netherlands, New Zealand, Singapore, Switzerland, the United Kingdom and the United States.

Virginia Mason is just one example of a (short) list of US health care providers where innovation is being developed in places like the Mayo Clinic, Mass General, Athena Health and then................the list gets shorter. I hope that soon, some others will rise to the challenge laid down by the ACA and start focusing on the patient instead of themselves.

"Culture Eats Strategy for Breakfast"
Going to this week's blog title; finding the solution to the schism in healthcare. How do you foster the notion of the importance of organizational health in healthcare? First, focus on the members of your top team. Make sure they are crystal clear about the identity (why) and direction (what) of the organization, and that they act (how) in ways that indicate they are aligned.

Next, be brutally intolerant of cultural or behavioral violations, especially among your most senior teams. Too often, organizations focus on systems and structures that facilitate cultural change at the mid-management level, overlooking problems closer to the top. Be quick to address behaviors such as passive-aggressiveness during meetings or back-channel second-guessing. Getting commitment around a shared vision and common goals is critical.

Finally, reinforce this through your recruiting process. Although most CEO's pay lip service to the idea of hiring for cultural fit, few have the courage or discipline to make it the primary criteria for bringing someone into the company. Instead, they continue to place too much emphasis on education, experience, and knowledge, reinforcing the mistaken belief that intelligence trumps behavior.

If any of this sounds soft, consider the very tangible benefits of organizational health: lower hiring costs, higher staff retention, better word-of-mouth marketing, and greater customer loyalty. Perhaps the ability to understand and act on all that may be the ultimate sign of corporate intelligence.
In short, the most successful companies focus on being healthy rather than intelligent.

NOTE: Why isn't organizational health practiced in healthcare?