What is worse, “poor” management or “under-management?”

Our firm normally gets called two or three years after the client hospital or health system needs help. These hospitals are normally “in the financial ditch” and require admission into our consulting intensive care unit. Explicit poor management is not difficult to detect. These hospitals have been losing money month after month and/or the leadership of the hospital has no vision for the future of the institution and/or the administration, board of directors, medical staff or some combination of these relationships are throwing sand on each other. Worse, we see patient and employee safety problems that would make you lose your appetite. It is this kind of client that does not even challenge our skills and abilities. It is often so patently obvious what needs to be done . . . we frequently discount our fees because it is not heavy lifting.

The potential clients we hate to work with have the following kind of attitudes and opinions. “We are breaking even, everybody seems pretty happy and we are not sure we need any help.” Pleeeeease deliver me from this cup and cross! These are the hospitals and health systems that are under-managed. They do not know what they do not know. They rarely monitor productivity against reliable benchmarks, the agenda for the board meeting is thrown together at the last possible moment, the input of the medical staff is studiously avoided and no one seems to really care about whether the employees work in a safe environment and if the patients are treated safely.

Our friends and partner consulting firms that work in the industrial sector rarely run into this kind of client. Let me use an example or two. The publicly traded company has no confusion about who they serve. It is the shareholder. Management has incentives to improve revenue and drive out poor quality, sub-standard service and squeeze out every nickel of unnecessary cost. A friend of mine is a project manager by training and experience. The management to whom he is accountable held him in high regard, gave him the highest ratings for his services and praised him in every reasonable way. Last week he lost his job. Management was able to find similar talent on the Pacific Rim willing to provide the same services at 45 percent of the cost. He is now out of work. The unnecessary costs were not tolerated.

We see hospital management and boards of directors willing to accept unnecessary costs within their hospitals . . . well, because we are breaking even. The fact that breaking even will never be sufficient to refresh the physical plant or field new and improved technology is lost on these executives and the board of directors. This kind of thinking is Neanderthal, at best. It is the kind of thinking that thoughtful board members observe and shake their head when they get put in their place when trying to provoke reform and alternative thinking.

Let’s look at the customer service at a major industrial giant WalMart. If you buy something that you get home and you suffer “buyer’s regret” or it does not perform as you had hoped, you simply take it back for a refund. No questions asked . . . they want you back for future purchases.

How about when a patient receives poor care or lousy service? Do they get a refund, or is the health insurer informed that they should not pay the hospital or physician for slipshod service or outcomes? A friend of mine recently had a cataract removed, and his vision worsened. When he questioned the eye surgeon, the surgeon was only too willing to admit that his hand slipped and he accidentally cut the eye in a manner that was not appropriate. The physician bills arrived right on time just as if the surgery had been performed perfectly. From a conceptual point of view it is almost too hard to take in. If you have your auto dealer replace a defective new fender on your car and it falls off on the way out of the dealership parking lot . . . should you have to pay for the fender repair? Of course not! In hospital and medical care you get the bill regardless of the outcome. Why?

The answer normally comes back as follow, “. . . that’s the way we have always done it; I think everyone does it that way; why fix what is not broken.” Organizational reality is this: you are moving forward or you are moving backward. There is no such thing as standing still.

If your institution is under-managed it is only a matter of time before you end up out of work and your former hospital is admitted to intensive care for a retrofit. If you feel a little queasy after reading this . . . the best thing you can do is re-examine how things are done and get some help. It is not necessary to call our firm, but call someone before your board chairman starts calling around for you after you are gone.

Jan Jennings

Republished with permission from the Hospital News Group