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Flipping the switch to value-based healthcare

Posted Sep 03 2013 5:02pm

by Kenneth H. Cohn

"We face a serious dilemma," recounted a community hospital CEO who participated in my seminar , Practical Strategies for Engaging Physicians. "If we stop doing fee for service now, it will cost us millions of dollars. On the other hand, if we wait, the trap door may close behind us. We need to be ready to flip the switch."

All the other CEOs in the room nodded their heads.

The fundamental challenge in the transformation of U.S. healthcare from volume to more value-based metrics is readiness in an uncertain environment. As I've noted, "complex adaptive systems involve a collection of people acting interdependently, such that one group's response changes the context for everyone else."1

Phil Newbold, CEO at Memorial Hospital in South Bend, Ind., tithes 1 percent of annual revenues to support new processes and technologies because he believes innovation is an important core competency. He provides innovation training to all employees and has built a culture of innovation through rapid prototyping and creating what he calls a cadence of accountability--"knowing that others are counting on you raises your commitment." Rewarding learning rather than punishing failure empowers people to embrace innovation and creates a safe environment for reflection and dialogue.2

During the seminar, we agreed authentic physician engagement is an essential component of healthcare innovation. As a physician from upstate New York quipped, "When we don't have a seat at the table, we feel like we are on the menu."

I mentioned in " Collaborative Compact " that a social compact between physicians and hospital leaders can clarify communication and expectations and facilitate improved collaboration and readiness. The bottom-up process also can improve physician-physician communication and accountability.

People may wonder where we will find the physicians to participate in innovation and readiness efforts. A group of committed physician champions can lead task forces in areas such as supply-cost management, recruitment and retention, and consideration of new services, as I noted in " MAP-MEC differences ." For instance, one previously skeptical physician commented, "The reason for my change in behavior is that I feel like I am making my time count." 3

A hospital CEO reinforced the need for physician engagement to flip the switch on healthcare innovation, saying in Charting The Course: Launching Patient-Centric Healthcare , "The people, if appropriately chosen and led through vision and engagement, will do most of the hard tactical work, provided we train them, we trust them and we listen to them."

1 Cohn KH, Lambert M. (2005) "Embracing Complexity." Better Communication for Better Care: Mastering Physician-Administrator Collaboration , Chicago: Health Administration Press, 31.

2 Cohn KH, Fellows S, eds. (2011). "Launching an Innovation Revolution in Healthcare."Getting It Done: Experienced Healthcare Leaders Reveal Field-Tested Strategies for Clinical and Financial Success, Chicago: Health Administration Press, 63-74).

3 Cohn KH. (2006). "The Challenges and Opportunities of Collaborating with Creatively Abrasive Physicians." Collaborate for Success! Breakthrough Strategies for Engaging Physicians, Nurses, and Hospital Executives. Chicago: Health Administration Press, 11-20.)

Ken is a practicing general surgeon/MBA and CEO of , who divides his time between providing general surgical coverage and working with organizations that want to engage physicians to improve clinical and financial performance.

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