Monthly Archives: December 2013

First, Let’s Fire All the Managers

Strong words.

Hyperbole from irritated health care providers distraught with years of dealing with a growing health care bureaucracy that adds cost with no clear value in return?  Nope.  These are the words of Gary Hamel.  Mr Hamel is a management expert who founded Strategos, an international management consulting firm.  He has been credited as one of the originators of the concept of core competencies.  In 2008 The Wall Street Journal listed him as one of the world’s most influential business thinkers.  In 2009 Fortune magazine called him “the world’s leading expert on business strategy”.

First, Let’s Fire All the Managers was the title of an article written by Mr. Hamel that was published in the Harvard Business Review in December 2011.  The first sentence in the paper states that  “management is the least efficient activity in your organization”.  Mr. Hamel then goes on to explain how an ever-expanding hierarchy of managers comes with an excessive financial and productivity cost to an organization.  Too many people telling other people what to do and not enough people doing things.  The message seems to be that leaders should spend resources on delivering the product or service not in creating a hierarchy.

There is evidence that an excessive managerial hierarchy is pervasive in the health care system.  In 2013, The Institute of Medicine published “Best Care at Lower Cost.  The Path to Continuously Learning Health Care in America.”  A very striking table in this publication lists the estimated sources of $765 billion of waste.  Excess administrative cost is responsible for $190 billion.  That amounts to @ 25% of all of the waste.  It is likely that a large proportion of this excess administrative cost is directly related to an excessive managerial hierarchy.  And every provider will tell you that it is rare that a manager or administrator ever asks if there is a way that they can help you provide better care.  Rather, they focus on how you can generate more revenue.  A product of the current, and hopefully at some point historic, model of volume driven corporate health care.

What is the ideal ratio of managers and VPs to health care providers?  One is often referred to data from the Medical Group Management Association (MGMA).  These data are backward and sideways looking.  Is anyone looking toward the horizon?  Does anyone look at that 25% of excess cost as a target for cost savings?  In a previous post here at HCR titled “Tell Me What You Do Again And Why It’s Important?” a scenario was depicted where every manager and VP was asked to justify their value to the organization by answering one simple question: How do you help providers deliver value (evidence based and cost-effective) driven care?  Not being willing or able to pursue this issue translates into leaving $190 billion dollars on the table.

One of the main themes of HCR is to redefine the practice of Medicine and establish a new culture.  The anti-corporate health care culture.  The first step in eliminating the cost of unnecessary managers and administrators is to empower providers.  The providers then must accept the new responsibility and be held accountable.    Providers have been kept in the dark regarding the operations of health care.  If providers were empowered with financial data and became active participants in the health care delivery process layers of unnecessary managers could be eliminated.  Or better yet they can refocus their efforts toward helping providers deliver better care.

There are $190 billion sitting there.

What If Physicians Had More Time?

Time is one of the few non-renewable resources and the most important one.   For health care providers the delivery of care has gotten incredibly complicated and frustrating and no provider feels as if they have enough time to dedicate to caring for patients.  The focus has been on generating volume not quality.  And while providers have been asked to deliver more there have been layers of MBA and administrative “processes” most of which have never been demonstrated to make health care better and all of which take time away from patient care.  A physician recently shared his irritation with having to complete multiple forms, all documenting the same information, after a simple surgical procedure.  So the administrative leadership of health care has pushed providers to deliver more volume faster and has made it more difficult to do so.  Sounds like a situation in need of a healthy dose of Toyota Lean.

While many physicians and providers assume a defensive position when non-health care management strategies are implemented it may be beneficial for physicians and other providers to embrace the Toyota Lean strategies.  The goal of Toyota Lean is to eliminate waste and enhance value.  If successful one can assume that a great deal of wasted time could be recovered.  And just think of the possibilities.

More time to read.  A theme here at HCR has been that the erosion of the practice of medicine as a profession has been the single greatest detriment to quality health care.   And it is the opinion of HCR that the sine qua non of a profession is the mastery of the body of science, data and literature which forms the foundation of the profession.  What if an hour per day of useless administrative process was eliminated and instead that time was used to review all of the relevant journal articles that had been published that day?  It is likely that there would be more evidence based care.  And it is likely that there would be less anecdotal care which has been show to be inefficient, ineffective and costly.  If one were interviewing applicants to be their personal physician I would hire the one that reads the most.  Physicians need more time to read.

More time to listen.  The value of listening to what a patient has to say has been completely trivialized in the current model of health care.  When a physician is an hour behind in the office because he/she has triple booked appointments to meet volume targets listening to a patient is not a priority.  However, listening is always important.  Always.  Listening establishes the fact that the physician-patient relationship is based on communication that is bidirectional.  If a physician listens he/she can almost always ascertain something about a patient or a patient’s disease that is unique and thus the care can be customized.  Physicians need more time to listen.

More time to explain.  The physician-patient relationship works best when it is based on communication and education.  Patients need to be engaged and active participants in their care.  Patients are appreciative if they are educated with respect to their disease and therapy.  They are also much likely to be compliant.  Physicians need more time to educate their patients.

As health care reform moves forward there is a great deal of effort focused on eliminating waste.  The efforts need to include not just wasted money but also wasted time.  And there is an enormous amount of wasted time.  A system must then be developed where physicians and other providers are enabled to genuinely improve health care in the ways described.